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WELLS FARGO RECEIVES MASSIVE $190 MILL. FINE FOR FRAUDULENTLY OPENING 1.5 MILL. FAKE ACCOUNTS

  • Jared Hartman, Esq.
  • Posted on September 19, 2016

 

Just recently Wells Fargo agreed to a settlement with government agencies (The office of the Comptroller of Currency, the Consumer Financial Protection Bureau, and the Los Angeles City Attorney) to pay a civil penalty of $190 million over its disturbing history of opening fake accounts in customers’ names without the customers’ consent or authorization.

Government investigations have revealed that Wells Fargo pushed its branches to meet high sales quotas, and that a rampant scheme amongst several managers and employees resulted in accounts and credit cards being opened in customers’ names in order for the branches to meet the high quotas. A Wall Street Journal article that describes this history of this disturbing issue can be read by clicking HERE .

In May 2015, the Los Angeles City Attorney filed a lawsuit suit against Wells Fargo, alleging the bank pressured its employees to commit fraudulent acts, including opening accounts for people that don’t exist. The City Attorney filed its lawsuit under the California Unfair Business Practices Act and Unfair Competition Laws.

The CFPB and the Office of the Comptroller of the Currency also opened investigations and found that bank employees illegally transferred money from legitimate accounts into unauthorized ones opened for customers without their approval.

More information about the investigation can be read in this CNN Money article, by clicking HERE

Per the Press Release issued by the CFPB:

“Spurred by sales targets and compensation incentives, employees boosted sales figures by covertly opening accounts and funding them by transferring funds from consumers’ authorized accounts without their knowledge or consent, often racking up fees or other charges. According to the bank’s own analysis, employees opened more than two million deposit and credit card accounts that may not have been authorized by consumers.”

“Wells Fargo employees secretly opened unauthorized accounts to hit sales targets and receive bonuses,’ said CFPB Director Richard Cordray. “Because of the severity of these violations, Wells Fargo is paying the largest penalty the CFPB has ever imposed. Today’s action should serve notice to the entire industry that financial incentive programs, if not monitored carefully, carry serious risks that can have serious legal consequences.”

A copy of the CFPB consent order can be read HERE

Wells Fargo now claims that it will eliminate all sales goals for credit cards, checking accounts, and other retail products starting January 1, 2016 as a measure of addressing these concerns. Additionally, approximately 5,300 employees have been fired over this rampant scheme of fraud. A Los Angeles Times article on Wells Fargo’s recent response can be read HERE.

However, despite the fine and employee terminations and promises of eliminating the aggressive sales tactics that resulted in the widespread scheme of fraud, some people are still outraged that no criminal proceedings are on the forefront. Newsman Ben Swann recently conducted a piece on this issue on his show Reality Check. Watch the video below:

We at Semnar & Hartman, LLP are experienced in handling these very issues on behalf of consumers. When an account is opened in a customers’ name without their consent or authorization, it is without a doubt an illegal account. And when that illegal account accrues fees and costs, but when those fees/costs are not paid because the customer is not aware of the account having been opened, there will inevitably be negative credit reporting and debt collection efforts.

Anyone who has been a victim of this scam deserves justice. We can help.

If you or a loved one have had this unfortunate experience, please do not hesitate to call us for a free and confidential consultation.

Please note, nothing herein is to be construed as legal advice, and is instead hyperbolic opinions on an issue of public concern. Proper legal advice can only be given after a full, and confidential, consultation takes place after a review of all of the client’s circumstances.

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DEFAULT JUDGMENT AGAINST ASSISTED CREDIT SERVICES, INC. FOR $30,784.65 FOR MALICIOUS CREDIT REPORTING VIOLATION AND ATTEMPTING TO COLLECT A PAID DEBT

  • Jared Hartman, Esq.
  • Posted on July 20, 2016

 

Default Judgment against Assisted Credit Services, Inc. for $30,784.65 for Malicious Credit Reporting Violation and Attempting to Collect a Paid Debt amount, even though the client’s insurance company had already paid more than half of the full debt and the client owed much less than what Assisted Credit was attempting to collect. Luckily, the client was smart enough to raise some red flags instead of just being tricked into blindly paying the full amount. Because the client did not trust Assisted Credit to be honest and ethical, she then paid the balance that she did owe directly to the medical provider. Assisted Credit then got upset and argued with her for depriving them of the ability to keep a portion for their collection “services” for not paying the debt through them.

Thereafter, Assisted Credit furnished an update to the client’s credit report with the false information that she still owed a balance on the alleged debt, even despite their irrefutable knowledge that the client had already paid the balance on the debt directly to the medical provider. Therefore, it was believed that Assisted Credit submitted the derogatory credit reporting information maliciously with the intention of causing damage to the client’s credit score because she paid the balance to the medical provider directly.

After being served with the lawsuit, Assisted Credit hired an attorney, but then for whatever reason fired that attorney and failed to participate in the lawsuit. Because a company or other organization cannot represent itself in court and must appear through an attorney (Rowland v. Cal. Men’s Colony, Unit II Men’s Advisory Council, 506 U.S. 194, 201–02 (1993), the Court graciously gave a deadline to Assisted Credit to retain a new attorney or face default judgment. When Assisted Credit failed to comply, the Court entered default of Assisted Credit. Recently, on July 19, 2016, the Court entered judgment in favor of Plaintiff in the amount of $30,784.65 for the violations alleged.

The Court acknowledge that “Actual damages for credit reporting violations under either statute can include emotional distress and humiliation. See Guimond v. Trans Union Credit Info. Co., 45 F.3d 1329, 1332–33 (9th Cir. 1995) (holding that “emotional distress, manifested by sleeplessness, nervousness, frustration, and mental anguish resulting from the incorrect information in her credit report” can be properly compensated). The Court agreed that the requested damages were appropriate for this client, because she “suffered frustration, anxiety, lack of focus on her livelihood, and feelings of hopelessness” and because her “consumer credit score took a hit after Assisted Credit reported the already-paid debt—a hit that Plaintiff acutely felt, as she had worked hard to rebuild her credit after a prior bankruptcy.” Further, the Court agreed that the credit reporting violations were willful: “evidence of Assisted Credit’s willful conduct in reporting a $120 debt when Assisted Credit affirmatively knew that the debt had been paid warrants punitive damages.” The Court’s well-reasoned and articulate ruling can be read by simply clicking HERE.

This represents a nice opinion confirming that the law and the Courts will protect consumers being harassed by malicious debt collectors who flagrantly violate the law. If you or a loved one are being harassed, lied to, treated unfairly, or notice inaccurate information on your credit report, you should not feel alone and helpless. The law firm of Semnar & Hartman, LLP are experienced in protecting consumers and individuals in these situations. Consultations are always free and confidential, and can be done over the phone to reduce the burden on the client who may just need some questions answered. Do not hesitate to call and discuss your rights!

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