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Lawsuit accuses Wells Fargo of opening unauthorized bank accounts

On Behalf of | Aug 11, 2023 | Securities and Compliance

A class action lawsuit has been filed against Wells Fargo claiming that the bank fraudulently opened unauthorized checking accounts for at least 40 people, reports ThinkAdvisor.

The lawsuit was filed in U.S. District Court for the Northern District of California in San Francisco, where Wells Fargo has its headquarters. The suit also names Early Warning Services, a specialty credit bureau, alleging that the bureau secretly helped Wells Fargo transfer funds from the unauthorized accounts.

The plaintiff, Bernard J. Patterson of Little Rock, Arkansas, claimed that in March 2022 nearly $5,000 was placed in an unauthorized account in his name and then paid out to an unknown third-party group. According to Patterson’s complaint, the Consumer Financial Protection Bureau said there could be more than 40 other consumers who had unauthorized Wells Fargo accounts opened in their name between March and June 2022.

The lawsuit accuses Wells Fargo of engaging in synthetic identity fraud, in which Wells Fargo and Early Warning used fake and real personal identification information to open the unauthorized accounts in the names of consumers.

The suit alleges that through the accounts, “Wells Fargo secretly processes unauthorized electronic funds transfer transactions in its victims’ names using these unauthorized accounts … and, with assistance from Early Warning, Wells Fargo also fraudulently obtains its victims’ valuable true and correct personal identification and personal financial information.”

The suit requests damages and injunctive relief for violations of the Racketeer Influenced and Corrupt Organization Act, the Electronic Funds Transfer Act, the Fair Credit Reporting Act, and for negligence/gross negligence.

In a statement, Wells Fargo said that “the allegations of unlawful activity by Wells Fargo are without merit. Identity theft is (a) broad industry problem that we are all working to minimize.”

The latest lawsuit follows a previous fake accounts scandal in which the Securities and Exchange Commission said Wells Fargo opened millions of unauthorized or fraudulent customer accounts between 2002 and 2016 so employees could meet sales targets, and pressured customers into buying unnecessary products. Wells Fargo entered into consent orders with federal regulators to develop plans to avoid any further harm to consumers.

The lawyers at Lewitas Hyman have extensive experience representing companies both large and small, as well as employees, directors, officers and shareholders, in complex commercial litigation matters pending in federal and state courts nationwide and in arbitrations before various dispute resolution forums. Our attorneys have over 55 years of collective experience litigating matters. Please contact us at (888) 655-6002 for more information about our securities and commercial litigation practice.