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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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LAWSUITS ALLEGE WELLS FARGO BANK HAS ENGAGED IN MULTIPLE ACTS OF HARASSMENT, MISREPRESENTATIONS, AND DECEPTION TOWARDS ITS OWN CUSTOMERS

  • Jared Hartman, Esq.
  • Posted on November 25, 2014

 

Multiple lawsuits have been filed recently against Wells Fargo Bank, N.A. alleging various violations of consumer rights.

In one case, the customers allege that they had a home mortgage loan with Wells Fargo in the State of Kansas that resulted in a short-sale, through which Wells Fargo received the benefit of approximately $9,000.00 more than the debt actually owed on the loan. Unfortunately, however, Wells Fargo did not properly update their records, as they suddenly started calling the customers repeatedly and demanding that the customers still owed them approximately $111,780.35 on the loan. When the customers tried to explain that Wells Fargo had already been paid that amount plus an additional $9,000.00 more, the representatives refused to listen to the customers and argued with them about how the customers were wrong.

Additionally, the lawsuit alleges that Wells Fargo reported to the State of California Franchise Tax Board that the customers earned income within the State of California in tax year 2010, which prompted the Tax Board to issue notices of levies upon one of the customer’s wages for back taxes. However, the customers did not reside in the State of California in the year 2010, and the home mortgage loan dealt with property located in the State of Kansas. This lawsuit has alleged multiple violations of the Rosenthal Fair Debt Collection Practices Act to seek compensation for the emotional distress caused by Wells Fargo’s multiple incidents of deception, misrepresentation, and attempting to collect unlawful amounts. This complaint can be read here. WF Complaint 1

In another case, the customer had a student loan account with Wells Fargo. The lawsuit alleges that the customer transferred a payment from his Wells Fargo checking account into his student loan account in order to make a payment on his student loan obligation. Thereafter, Wells Fargo’s checking department reversed the payment without informing the client, which caused him to go into default on his student loan account without knowledge and without any fault of his own. The lawsuit further alleges that the student loan department began placing an unreasonable and obscene amount of calls to the customer and demanding that his acceleration clause kicked in to the point where he now owed the full amount of the loan, and the collection agents refused to listen to his explanation of how the default was no fault of his own.

After a Wells Fargo representative finally agreed that the default was no fault of the customer and reversed the default status on the account, Wells Fargo failed to properly update the customer’s consumer credit report and maintained that he was in default status, and even reported two derogatory accounts for the customer even though he only had one student loan account. The lawsuit therefore seeks redress for multiple violations of the Rosenthal Fair Debt Collection Practices Act and the State and Federal Fair Credit Reporting Acts for Wells Fargo’s unfairness at reversing the student loan transfer, misrepresentations as to the acceleration clause being triggered, attempting to collect improper amounts, and failing to properly report accurate information upon the customer’s consumer credit report. This complaint can be read here. WF Complaint 2

Another lawsuit alleges that Wells Fargo unfairly harassed the customer’s elderly mother during a time when she could not be subjected to undue stress in her life. The lawsuit alleges that the customer had not even defaulted upon his home mortgage loan, but for some reason Wells Fargo placed at least 35 calls to his mother between November 4, 2014 and November 21, 2014 and claimed that they were looking for her son. The mother repeatedly told the agents that the son does not live with her and she has nothing to do with the son’s home mortgage loan, and repeatedly insisted that they stop calling her. However, Wells Fargo refused to honor her request and maintained their persistence in calling her. The mother was recovering from a recent cardiac procedure and had been advised by her doctor to avoid all stress, and she was also grieving from the recent passing of her mother-in-law. The lawsuit alleges that Wells Fargo’s persistent placement of harassing calls to her increased the stress inflicted upon her at a time when she should not have had to be bothered by Wells Fargo. This lawsuit seeks redress for multiple violations of the California Rosenthal Fair Debt Collection Practices Act for unfair and harassing phone calls to both the customer and his mother. This complaint can be read here. WF Complaint 3

If you or a loved one are having to suffer harassment inflicted by Wells Fargo similar to the above lawsuits, please do not hesitate to call us for further information as to what your rights are and how you can stand up for yourself. The playing field does not have to be one-sided in the industry of consumer credit. Our nation’s financial super powers should NOT be permitted to treat their own customers in such a fashion and should be taught that they have to uphold and respect consumer rights! As always, any consultation about consumer rights is done free of charge and maintains confidentiality.