Aug. 12 (UPI) — A group of small business owners is suing Wells Fargo alleging the nation’s third-largest bank intentionally preyed on them with onerous fees and deliberately confusing rules about their accounts.
The lawsuit is the latest allegation of impropriety by the San Francisco-based lender. The bank already admitted it opened more than 2 million accounts that customers didn’t know existed, then charged them fees associated with the phantom accounts. It has also been accused of pushing unnecessary auto insurance on customers seeking car loans.
In the most recent incident, Consumerist reported, multiple small business owners who used Wells Fargo said they were charged large fees for failing to meet the terms of their account. A Charlotte man who owned a local tour company said the bank charged him $20 to $35 every month because his business did not generate enough credit card transactions. A Pennsylvania restaurant owner said Wells Fargo threatened a large early termination fee when she tried to close her account after the restaurant went out of business.
CNN reported an anonymous former employee in Wells Fargo’s Merchant Services division said workers were specifically told to target small business owners as new clients because they likely would not understand the 63-page new business account terms-of-service document.
“We used to be told to go out and club the baby seals: mom-pop-shops that had no legal support,” the employee told CNN.
Wells Fargo denied the allegations and said its business accounts are fairly administered.
“We deny these claims and intend to defend against [it],” the company told CNN.
The latest legal problems come as fallout from the fake accounts scandal continued to roil the bank’s leadership. The Wall Street Journal reported this week that Wells Fargo Nonexecutive Chairman Stephen Sanger is likely to announce his departure sometime this month. Sanger has served on the Wells Fargo board since 2003 and assumed its chairmanship last October after his predecessor, John Stumpf, abruptly retired when the fake accounts scandal was made public.
Members of the Wells Fargo board of directors received tepid support from shareholders at the company’s annual meeting, with Sanger getting just a 56 percent vote of support from investors angry about the steady stream of scandals and negative publicity.