Another Wells Fargo class action lawsuit was filed last week, after the bank's customers took legal matters on the 16th of September. What is it this time that Wells Fargo has been accused of?
27 September, AtoZForex – Earlier this month, clients of Wells Fargo filed a lawsuit against the bank for opening fake accounts. Wells Fargo has been accused again but this time the claim is brought by its former employees. Alexander Polonsky and Brian Zaghi have filed a class action attempting to receive a compensation of $2.6 billion from the bank. This sum is a reimbursement for personnel who sought to accomplish aggressive sales quotas without being involved in fraudulent activity.
What are the complaints of former employees?
Wells Fargo class action lawsuit was filed in California Superior Court. The complaint was brought on behalf of both former and current employees, who worked for the bank during past 10 years. Those employees were acting ethically and thereby sometimes were not able to meet sales quotas. Due to it, they were penalized by their managers. According to the Court, Wells Fargo dismissed or demoted staff who did not reach unrealistic quotas. Opposed to it, employees who met quotas by opening fake were promoted by the bank. Hereby, the claim accuses Wells Fargo of unfair dismissal, illegal business practices and inability to pay salary, overtime and fines under California law.
The Bank was aware of the situation
According to Alexander Polonsky and Brian Zaghi, staff was pushed to meet quotas of 10 accounts per day along with the requirement to deliver progress reports couple of times a day. In order to meet this aggressive targets, employees had to work off-the-clock, getting $12 per hour. Furthermore, the staff who did not manage to reach targets were rebuked.
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Because of it, many employees engaged in fraudulent activity by opening fake accounts. However, those who attempted to reach goals ethically suffered from losing salaries, benefits while being stressed and humiliated.
In addition, the lawsuit commented that the bank was aware of the situation:
"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 above-mentioned disclosures will have a serious impact on Wells Fargo's reputation. Considering that during the financial crisis, the Wells Fargo was proclaiming to be a conservative bank as opposed to its competitors.
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