L. A. ac­cuses Wells Fargo of over­billing

Los Angeles Times - - LOS ANGELES - By Emily Alpert Reyes

Los An­ge­les City Con­troller Ron Galperin says the city paid more than $ 500,000 to Wells Fargo Bank for “nonex­is­tent ser­vices” — charges for print­ing checks that the city was ac­tu­ally print­ing it­self.

Galperin and his aides are de­mand­ing that the money be re­turned. In a let­ter sent last week to the city trea­surer and ob­tained by The Times, Galperin urged that the over­paid money be re­cov­ered “as swiftly as pos­si­ble.”

“It is trou­bling that these over­billings have oc­curred and re­mained un­de­tected for such a long pe­riod of time,” he wrote.

Wells Fargo Whole­sale Bank­ing spokesman Gabriel Boehmer said the com­pany was work­ing with the city to ex­am­ine the pay­ments and had stopped the dis­puted charges in May “as we be­gan to re­search the mat­ter.”

“If a re­fund or ad­just­ment is due to the city, we will make one, just as we would with any other cus­tomer,” Boehmer wrote in a state­ment emailed to The Times.

The city con­troller’s of­fice scru­ti­nized in­voices and tal­lied more than $ 500,000 in charges for print­ing ven­dor and pay­roll checks be­tween Fe­bru­ary 2012 and March 2015, although Los An­ge­les prints such checks us­ing its own sys­tems, Galperin wrote.

Galperin aides said the to­tal amount that the city was billed for such ser­vices may be higher be­cause the bank con­tract dates from 2008.

Un­der that con­tract, Wa­chovia Bank — which was ac­quired by Wells Fargo — was to pro­vide a wide range of bank­ing ser­vices, in­clud­ing di­rect de­posit ser­vices, pay­roll tax pro­cess­ing and elec­tronic re­ceipt and pay­ment plat­forms.

In his let­ter, Galperin urged City Trea­surer An­toinette Chris­to­vale to scru­ti­nize all Wells Fargo in­voices to check for any other charges for ser­vices that the bank did not pro­vide, to re­view in­ter­nal con­trols and to “de­ter­mine if sim­i­lar risks ex­ist in other con­tracts.”

Chris­to­vale said late Mon­day that her of­fice had been work­ing with Wells Fargo and Galperin’s of­fice to de­ter­mine how much the city had over­paid.

“Once con­firmed, we in­tend to fully re­cover what is due to the city,” Chris­to­vale wrote in an email. She said her staffers are still re- search­ing how the over­pay­ments went un­no­ticed.

Los An­ge­les is al­ready fac­ing off with the bank in court: City Atty. Mike Feuer f iled a suit against Wells Fargo this year al­leg­ing that the bank en­cour­aged em­ploy­ees to en­gage in “un­fair, un­law­ful and fraud­u­lent con­duct,” in­clud­ing open­ing unau­tho­rized ac­counts for cus­tomers.

At the time, Wells Fargo said that it would vig­or­ously de­fend it­self against the ac­cu­sa­tions and that its “cul­ture is fo­cused on the best in­ter­ests of its cus­tomers.”

In the face of the new con­cerns about over­pay­ment, Galperin said in a state­ment that the city had a long­stand­ing re­la­tion­ship with Wells Fargo, and that “it is my hope that, in the spirit of that re­la­tion­ship, the bank will make us whole.”


Richard Vo­gel As­so­ci­ated Press

WELLS FARGO charged for print­ing checks, but L. A. prints its own, City Con­troller Ron Galperin says. The bank halted the dis­puted charges in May.

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