Wells Fargo Faces Proposed Class Action Lawsuit Over Bogus Account Scandal

5,300 employees were fired after it was revealed that the bank opened millions of accounts without customers' knowledge.
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Wells Fargo & Co, embroiled in a scandal over the opening of sham accounts, was sued on Friday by customers who accused the bank of fraud and recklessness for its behavior.

The lawsuit was filed in the U.S. District Court in Utah, and seeks class-action status on behalf of hundreds of thousands of customers nationwide.

Wells Fargo did not immediately respond to requests for comment.

Last week, the San Francisco-based lender agreed to pay $190 million to settle regulatory charges that employees opened some 2 million accounts without customers’ knowledge, in order to meet sales targets.

Wells Fargo, the country’s third-largest bank by assets, has said it has fired 5,300 people over the matter and would eliminate sales goals in its retail banking on Jan. 1, 2017.

Federal prosecutors have begun examining Wells Fargo’s practices, and the bank’s Chief Executive Officer John Stumpf is scheduled to testify before Congress next week.

In the complaint, three plaintiffs said customers were hurt by “abusive and fraudulent tactics” used by employees who felt they had to “do whatever it takes,” including selling products they did not need or want, to meet sales quotas.

It was not immediately clear how the three named plaintiffs were specifically harmed by the bank’s alleged wrongdoing.

The case is Mitchell et al v. Wells Fargo Bank NA et al, U.S. District Court, District of Utah, No. 16-00966.

(Reporting by Karen Freifeld; additional reporting by Jonathan Stempel in New York; Editing by Cynthia Osterman)

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Before You Go

GoBankingRate's 5 Worst Places To Retire Rich
Hawaii(01 of05)
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Though it's a vacationer's paradise, Hawaii isn't the best retirement option, according to GoBankingRates, due to the high cost of living. The average home cost is the highest on the list. Best save this destination for a sunny getaway. (credit:Getty Images/Flickr RF)
Vermont(02 of05)
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Vermont lands near the bottom of the list thanks to high taxes on both property and Social Security income. (credit:Denis Jr. Tangney)
North Dakota(03 of05)
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High Social Security taxes combined with poor banking rates put North Dakota in the bottom five. (credit:shutterstock)
Montana(04 of05)
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Though Montana boasts no state sales tax, banks here offer some of the lowest interest rates on savings and CD accounts, making it hard to grow your savings. (credit:Mark Miller Photos via Getty Images)
New Mexico(05 of05)
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Retirees in New Mexico have low Social Security benefits on average and Medicare spending per capita is low as well. (credit:Getty Images)