The city of LA is accusing Wells Fago of predatory lending practices that targeted minority borrowers and led to the loss of property tax revenue, and the US District Court on Wednesday ruled that the city's claims were adequate for the case to proceed - Reuters Photo.
CHICAGO: Two former Wells Fargo & Co employees have filed a class action in California seeking $2.6 billion or more for workers who tried to meet aggressive sales quotas without engaging in fraud and were later demoted, forced to resign or fired.
The lawsuit on behalf of people who worked for Wells Fargo in California over the past 10 years, including current employees, focuses on those who followed the rules and were penalized for not meeting sales quotas.
"Wells Fargo fired or demoted employees who failed to meet unrealistic quotas while at the same time providing promotions to employees who met these quotas by opening fraudulent accounts," the lawsuit filed on Thursday in California Superior Court in Los Angeles County said.
Wells Fargo has fired some 5,300 employees for opening as many as 2 million accounts in customers' names without their authorization. On Sept. 8, a federal regulator and Los Angeles prosecutor announced a $190 million settlement with Wells.
The revelations are a severe hit to Wells Fargo's reputation. During the financial crisis, the bank trumpeted being a conservative bank in contrast with its rivals.
A Wells Fargo spokesman on Saturday declined to comment on the lawsuit.
The lawsuit accuses Wells Fargo of wrongful termination, unlawful business practices and failure to pay wages, overtime, and penalties under California law.
Former employees Alexander Polonsky and Brian Zaghi allege Wells Fargo managers pressed workers to meet quotas of 10 accounts per day, required progress reports several times daily and reprimanded workers who fell short.
Polonsky and Zaghi filed applications matching customer requests and were counseled, demoted and later terminated, the lawsuit said.
While executives at the top benefited from the activity, the blame landed on thousands of $12-per-hour employees who tried to meet the quotas and were often required to work off the clock to do so, the lawsuit said.
Employees with a conscience who tried to meet quotas without engaging in fraud were the biggest victims, losing wages, benefits and suffering anxiety, humiliation and embarrassment, the lawsuit said.
Wells Fargo was aware many accounts were illegally opened, unwanted, carried a zero balance, or were simply a result of unethical business practices, the lawsuit said.
"Wells Fargo knew that their unreasonable quotas were driving these unethical behaviors that were used to fraudulently increase their stock price and benefit the CEO at the expense of the low level employees," the lawsuit said. - Reuters
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