New Mexico wants damages from Wells Fargo over fake accounts

AG Hector Balderas seeking to have state’s victims paid back

The states of California and Ohio aren’t quite ready for things with Wells Fargo to go back to normal in the wake of the bank’s fake account scandal – and it looks like New Mexico isn’t either.

Both California and Ohio recently extended the states’ bans on doing business with Wells Fargo over the bank’s various issues, including the bank being fined $185 million for more than 5,000 of the bank’s former employees opening more than 2 million potentially unauthorized accounts to get sales bonuses.

Now, New Mexico is set to join those two states in taking action against Wells Fargo, specifically for the fake account issue.

New Mexico Attorney General Hector Balderas announced this week that his office is seeking damages from the bank on behalf of the state’s residents that were affected by Wells Fargo’s actions.

In a statement, Balderas said that his office has been investigating Wells Fargo’s actions for more than a year and plans to demand for damages on behalf of “thousands of New Mexicans who were victimized by an illegal scheme creating nearly 19,000 fake and unauthorized bank and credit card accounts.”

Balderas said that his office’s investigation uncovered much of the same behavior that led to the Consumer Financial Protection Bureau, the Office of the Comptroller of the Currency, and the city and county of Los Angeles to levy the $185 million fine.

“The Attorney General’s investigation revealed that Wells Fargo’s corporate management pressured employees to put profits over people, which led employees to open millions of unauthorized accounts,” Balderas’ office stated.

“To meet unrealistic quotas and sales targets imposed by Wells Fargo executives, employees resorted to opening accounts and credit cards for customers without their knowledge or permission,” Balderas’ office continued. “The fake accounts generated fees for Wells Fargo, padding its bottom line while New Mexican families paid the price. New Mexicans could have been paying for groceries, clothes, or college savings, but were instead hit with illegal fees, draining their bank accounts and damaging their credit scores.”

According to Balderas, Wells Fargo was well aware of the sales practices, but “did nothing” to stop the employee behavior.

Balderas said that the bank also “failed to create an adequate risk management framework that would have alerted it to questionable sales practices.”

Therefore, Balderas said he is prepared to sue Wells Fargo if the bank doesn’t fork over damages to the affected consumers.

“While hard working New Mexico families were struggling to put food on the table, pay their bills and save what’s left for the future, Wells Fargo was scamming them and charging them fees for accounts they never authorized,” Balderas said in a statement.

“When New Mexicans choose a bank, especially one with a national reputation, they deserve to be treated fairly and honestly,” Balderas added. “My office will work directly with Wells Fargo to recover damages for the New Mexicans who were harmed, but if we cannot reach a resolution, I will bring litigation to make New Mexicans whole again.”

In a statement provided to HousingWire, Wells Fargo said the bank has already taken “significant steps” to compensate New Mexicans.

“At Wells Fargo, we remain focused on rebuilding trust and building a better bank. We have taken significant steps to make things right for our New Mexico customers who may have been affected by unacceptable retail sales practices,” the bank said in a statement.

“These steps include a $142 million class-action settlement agreement; conducting broad outreach and working directly with customers to resolve issues through our complaints process and free mediation services; completing an expanded third-party review of retail banking accounts dating back to the beginning of 2009 to determine potentially unauthorized accounts and provide refunds and credits to those that incurred fees and charges,” the bank said. “We continue to welcome – and encourage – customers with questions or concerns to contact us. Our more than 1,400 team members in New Mexico are committed to the success of our communities.”

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