Balderas sues Wells Fargo over illegitimate accounts
State seeking jury trial, along with civil penalties, restitution, attorney fees
New Mexico is suing Wells Fargo over a scandal in which the financial institution was accused of opening millions of unauthorized bank and credit card accounts across the nation to meet unrealistic sales quotas, state Attorney General Hector Balderas announced Thursday.
Balderas’ office filed a lawsuit in District Court alleging that Wells Fargo violated state laws, following major fines and penalties already levied by federal regulators because of the scandal, which severely damaged Wells Fargo’s reputation.
Balderas claimed Wells Fargo opened more than 20,000 fake accounts in the name of
New Mexico residents and that the bank enrolled consumers in unauthorized products and lied to them about their status.
The lawsuit asked for Wells Fargo to be assessed a penalty of $5,000 for each unauthorized account opened for a New Mexico resident. It’s also seeking similar fines for other alleged violations.
“It’s deeply troubling that a company with this much at stake in our state would mislead New Mexico consumers and allow unlawful profiteering,” Balderas said in a statement.
The state is seeking a jury trial along with civil penalties, restitution and attorney fees.
Michael English, a spokesman for Wells Fargo in New Mexico, said the company has taken significant steps to make things right for customers, employees and the communities where it does business.
With about 90 branches in New Mexico, Wells Fargo has more locations in the state than any other bank.
English said the company completed a review of retail banking accounts dating back to the beginning of 2009 to determine potentially unauthorized accounts and provide refunds and credits to people who incurred fees and charges. He said it has tried to resolve problems through its complaint process and free mediation services.
Nationally, Wells Fargo was rocked in 2016 by the scandal over practices in which employees created millions of accounts without customers knowing about or authorizing them to meet the company’s ambitious sales goals.
Wells Fargo Chief Executive
Tim Sloan apologized during a congressional hearing last fall and the company has since changed its sales practices and ousted executives. The bank also paid $185 million in fines and agreed to set aside $142 million for customer remediation and settlement expenses as part of a nationwide class-action lawsuit.
The attorney general’s case focuses on violations of the New Mexico Unfair Practices Act.
“For some customers, their accounts were placed into collection. For others, they were forced to fight with debt collection agencies for fees charged by Wells Fargo on the unauthorized accounts,” the lawsuit states.
The lawsuit also seeks penalties for cases in which Wells Fargo allegedly enrolled New Mexico customers in online-banking services without their knowledge or authorization and in cases in which debit cards were issued or the bank made false statements to consumers.