• by Thom Forbes , May 6, 2015

A “whatever-it-takes” sales culture at Wells Fargo bank, where managers allegedly “hound, berate, demean and threaten employees” to meet quotas and salespeople not only use “pernicious and often illegal sales tactics” but also open accounts without approval, is getting its day in court.

A civil complaint filed by the City of Los Angeles yesterday also “contends the largest California-based bank violated state and federal laws by misusing confidential information and failing to notify customers when personal information was breached,” according to the Associated Press.

“In its push for growth, Wells Fargo often elevated its profits over the legal rights of its customers,” Los Angeles City Attorney Mike Feuer said in a news conference announcing the lawsuit. The complaint asks that a penalty of $2,500 be assessed for each violation the bank “committed, caused, aided and abetted, or conspired to commit,” as well as restitution to affected customers.

The complaint “echoes” a Los Angeles Timesinvestigative report about the bank’s “pressure-cooker sales culture” published in December 2013, E. Scott Reckard, writes.

“Wells has blamed the problems on a few rogue employees who the bank has appropriately disciplined or fired. The city's investigation, however, found only token efforts by Wells to prevent customer abuses,” Reckard, who reported the original expose, writes.

“In addition to charging fees on unwanted accounts, San Francisco-based Wells Fargo harmed customers by placing them into collections based on unauthorized withdrawals and reported damaging information on their credit reports when unwarranted fees went unpaid, the suit alleges,” Reckard continues.

Yesterday, the bank “said it would ‘vigorously defend’ itself from the suit. But the statement it issued did not deny or even address whether its employees opened unauthorized accounts as charged,” writes Chris Isidore for CNNMoney.

“Wells Fargo's culture is focused on the best interests of its customers and creating a supportive, caring and ethical environment for our team members,” the statement asserts. “This includes training, audits and processes that work together to support our vision & values and our commitment to customers receiving only the products and services they need and will benefit from.”

The lawsuit paints a different scenario.

“The complaint also provided a glossary of terms that it said Wells Fargo employees used to describe unsavory sales tactics, such as ‘pinning,’ or assigning personal identification numbers to customer debit cards without their authorization in order to open an online banking account, which counts toward the sales quota,” writes the Wall Street Journal’s Peter Rudegeair, who also culled the quotes cited in our lede. 

Other tactics alleged in the 19-page complaint include “sandbagging” — the practice of “failing to open accounts when requested by customers, and instead accumulating a number of account applications to be opened at a later date.” 

Then there’s “bundling” — “incorrectly informing customers that certain products are available only in packages with other products such as additional accounts, insurance, annuities, and retirement plans.”

Sounds like the cable company, no?

The complaint also singles out a cross-selling strategy called “Going for gr-eight.” A brochure the bank published states: “Our average retail banking household has about six products with us,” according to item 20 in the complaint. “We want to get to eight … and beyond. One of every four already has eight or more. Four of every 10 have six or more.”

But the attempt to achieve gr-eightness “puts unrelenting pressure on its bankers to open numerous accounts per customer,” the city charged.

“I worked for Wells Fargo as a banker very briefly. I never did any of this fraudulent activity, and because of that, underperformed the entire time I was there and working there was a nightmare,” writes Brittney Neff in a comment posted to the story on NBClosangeles.com. “I saw other employees do this and it was completely sickening.” 

“Having worked there, I can say not every manager pushes the way they describe in the article. I have worked with some that have tried to force unethical behavior on me,” posts Riley Fitzgerald in a comment to the WSJ’s story. “I watched a lot of people get fired for it, but the way the goals are structured made me feel like Wells encouraged that behavior and turned a blind eye.”

The title of Well Fargo’s most recent annual report is “Culture Counts.” The subhed: “An unwavering focus on the consumer.”

Nice thoughts, apparently open to interpretation.