The troubles for Wells Fargo & Co seem to have just begun.
After the US regulators pulled up the bank for irregularities related to fraudulent credit card accounts, seeking $2.6 billion or more for workers who tried to meet aggressive sales quotas without engaging in fraud and were later demoted, or forced to resign or fired, a class action in California was filed by two former Wells Fargo & Co employees.
Those employees who followed the rules and were penalized for not meeting sales quotas are the focus of the lawsuit which was filed on behalf of people who worked for Wells Fargo in California over the past 10 years, including current employees.
"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.
For the opening of as many as 2 million accounts in customers' names without their authorization, the Wells Fargo bank has fired some 5,300 employees over the last few years. A $190 million settlement with Wells was announced by a federal regulator and Los Angeles on Sept. 8 in relation to this case.
The revelations have dealt a severe blow to the reputation Wells Fargo. The bank was trumpeted being a conservative bank in contrast with its rivals during the financial crisis.
A Wells Fargo spokesman on Saturday declined to comment on the lawsuit.
Wrongful termination, unlawful business practices and failure to pay wages, overtime, and penalties are the allegations that have been leveled against Wells Fargo in the lawsuit filed by the former employees.
Managers at the bank pressed workers to meet quotas of 10 accounts per day, required progress reports several times daily and reprimanded workers who fell short, alleged the former employees of Wells Fargo - Alexander Polonsky and Brian Zaghi. The law suit said that Polonsky and Zaghi were counseled, demoted and later terminated and they are the ones who filed applications matching customer requests.
The employees were often required to work off the clock to do so and tried to meet the quotas and were paid $12 – per hour. And the law suit claimed that it ere these workers who were blamed even as the executives at the top rank benefited from the activity of unauthorized account creation.
The lawsuit said that many of the employees were the biggest victims and ended up losing wages and benefits and such employees with a conscience who tried to meet quotas without engaging in fraud suffered anxiety and humiliation and embarrassment.
The lawsuit further alleged that many accounts were illegally opened, unwanted, carried a zero balance, or were simply a result of unethical business practices and Wells Fargo was aware of the facts.
"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.
(Source:www.reuters.com)
After the US regulators pulled up the bank for irregularities related to fraudulent credit card accounts, seeking $2.6 billion or more for workers who tried to meet aggressive sales quotas without engaging in fraud and were later demoted, or forced to resign or fired, a class action in California was filed by two former Wells Fargo & Co employees.
Those employees who followed the rules and were penalized for not meeting sales quotas are the focus of the lawsuit which was filed on behalf of people who worked for Wells Fargo in California over the past 10 years, including current employees.
"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.
For the opening of as many as 2 million accounts in customers' names without their authorization, the Wells Fargo bank has fired some 5,300 employees over the last few years. A $190 million settlement with Wells was announced by a federal regulator and Los Angeles on Sept. 8 in relation to this case.
The revelations have dealt a severe blow to the reputation Wells Fargo. The bank was trumpeted being a conservative bank in contrast with its rivals during the financial crisis.
A Wells Fargo spokesman on Saturday declined to comment on the lawsuit.
Wrongful termination, unlawful business practices and failure to pay wages, overtime, and penalties are the allegations that have been leveled against Wells Fargo in the lawsuit filed by the former employees.
Managers at the bank pressed workers to meet quotas of 10 accounts per day, required progress reports several times daily and reprimanded workers who fell short, alleged the former employees of Wells Fargo - Alexander Polonsky and Brian Zaghi. The law suit said that Polonsky and Zaghi were counseled, demoted and later terminated and they are the ones who filed applications matching customer requests.
The employees were often required to work off the clock to do so and tried to meet the quotas and were paid $12 – per hour. And the law suit claimed that it ere these workers who were blamed even as the executives at the top rank benefited from the activity of unauthorized account creation.
The lawsuit said that many of the employees were the biggest victims and ended up losing wages and benefits and such employees with a conscience who tried to meet quotas without engaging in fraud suffered anxiety and humiliation and embarrassment.
The lawsuit further alleged that many accounts were illegally opened, unwanted, carried a zero balance, or were simply a result of unethical business practices and Wells Fargo was aware of the facts.
"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.
(Source:www.reuters.com)