Banking giant Wells Fargo & Company has been hit with a class action suit in Utah’s U.S. District Court. Filed on September 16th, the lawsuit represents up to one million Wells Fargo customers. The suit alleges Wells Fargo of “knowing theft, engagement in a continuous pattern of fraud” and “conspiracy to commit fraud.” The suit seeks compensation for damages as a result of over two million bank or credit card accounts being created without customer permission or knowledge.
Wells Fargo has declined to comment. The corporation has already been fined $100 million by the Consumer Financial Protection Bureau earlier this month. They are also expected to pay $35 million in fines initiated by the Office of the Comptroller of the Currency and another $50 million to the County and City of Los Angeles.
In the wake of the scandal, Wells Fargo has fired over 5,000 employees.
In an earlier statement, the bank said it took responsibility for any actions that resulted in customers receiving a product they did not ask for. It was also noted customers have been refunded any costs, totaling somewhere in the vicinity of $2.5 million. The corporation also downplayed the thousands of terminations, stating it only represented about one percent of their entire workforce.
Both federal prosecutors and the FBI have opened investigations. The Senate is reviewing the matter and a member of the U.S. House of Representatives says a committee will be launching an investigation of its own. Of the House investigation, Wells Fargo stated it welcomed the chance to cooperate and “provide the Committee with information on this matter and to discuss steps we have taken to affirm our commitment to customers.” It’s been said any hearing would be attended by Wells Fargo CEO John Stumpf.
The phony accounts were apparently created by Wells Fargo employees to make the bank money, boost sales figures and to maximize bonuses. For many of the accounts, employees actually created email address and PIN numbers to enroll customers in online banking services.
The suit asks for compensation as a result of damages caused by employees moving funds from existing customer accounts into new ones. In many cases, customers were charged overdraft fees for insufficient funds. The irony is the overdraft was the result of customer money being moved without their permission.
Wells Fargo is the second largest bank by market cap and the third largest in the country by assets.