Preventing Fraud, Protecting Our City

wells_fargo.jpg

Last week, I introduced two City Council motions aimed at curbing consumer fraud in Los Angeles. The need to take urgent action became apparent when I learned about the massive deception perpetrated by Wells Fargo at the expense of its customers. Because the City of Los Angeles is one of Wells Fargo's customers, my first motion instructs the city's Office of Finance to investigate whether or not the banking giant defrauded the city by creating fake bank accounts in the city's name, as happened to tens of thousands of unsuspecting individuals. The motion also ensures that the city won't pay unnecessary bank fees from bad actors.

The breadth of Wells Fargo's fraud is simply staggering. We need to know exactly how it has impacted our city and whether it has compromised taxpayer funds. My motion says, in part: "While the focus of the investigations has rightly been on the consumer banking division of Wells Fargo, the bank also employs a significant staff and sales force dedicated to commercial and institutional customers, one of which is the City of Los Angeles. Given the nature and egregiousness of the offenses involved, the disregard for the law among Wells Fargo staff, and the potentially significant impact of the banking fees involved in phantom accounts, it makes sense to investigate whether the sales staff in the commercial banking division of Wells Fargo was similarly pressured to add products to customers, including the city's bank accounts."
 
The Wells Fargo scandal also shows the importance of expanding the critical consumer protection work our City Attorney is doing, which is why I also introduced a motion to add more attorneys and staff to the office's consumer protection unit to investigate bank fraud and other similar violations of public trust. City Attorney Feuer's office successfully uncovered Wells Fargo's fraud and worked with federal authorities to hold them accountable for their outrageous misdeeds. The experience has illustrated precisely why his office needs more staff and resources to continue this essential work on behalf of the residents of Los Angeles. In addition to focusing on bank fraud, I have asked that the expanded consumer protection unit continue protecting renters, seniors and disabled people, preventing wage theft in minority communities and enforcing the Talent Scam Prevention Act. Find out more about the city's consumer protection efforts here.  
 
As always, if you have comments or ideas you'd like to share, please don't hesitate to contact me: paul.krekorian@lacity.org or (213) 473-7002