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Online Critics Decry Even More Wells Fargo Fraud Scandals (boingboing.net)
On Saturday author/blogger Cory Doctorow launched a new barrage of criticism towards Wells Fargo:
It's been a whole day since we learned about another example of systematic, widespread fraud by America's largest bank Wells Fargo (ripping off small merchants with credit card fees), so it's definitely time to learn about another one: scamming mortgage borrowers out of $43/month for an unrequested and pointless "home warranty service" from American Home Shield, a billion-dollar scam-factory that considers you a customer if you throw away its junk-mail instead of ticking the "no" box and sending it back.
$43/month gets you pretty much nothing: people who tried to actually use their AHS insurance found it impossible to get them to actually do anything in exchange for this money. Here's a quick Wells Fargo fraud scorecard: stealing thousand of cars with fraudulent repos; defrauding mortgage borrowers; blackballing whistelblowers; creating 2,000,000+ fraudulent accounts, and stealing millions with fraudulent fees and penalties.
Life Pro Tip: if you don't like banks, join a credit union.
$43/month gets you pretty much nothing: people who tried to actually use their AHS insurance found it impossible to get them to actually do anything in exchange for this money. Here's a quick Wells Fargo fraud scorecard: stealing thousand of cars with fraudulent repos; defrauding mortgage borrowers; blackballing whistelblowers; creating 2,000,000+ fraudulent accounts, and stealing millions with fraudulent fees and penalties.
Life Pro Tip: if you don't like banks, join a credit union.
I'm surprised that they're legal *anywhere*.
Or perhaps you're just one of the millions of people who've been screwed.
The difference is that they are owned by the depositors. Hence they are not subject to the same commercial pressures that regular banks are. Unfortunately most of the mutual financial organizations in the UK where destroyed in the 1980/1990's when the building societies converted to banks. During the financial crisis the building societies in the UK weathered the storm much better than the banks and demutilized former building societies did for example.
Many reasons.
* WF is huge, which means they have vast legal resources.
* Much of what they do is at the margins of legal
* The people losing money don't have many resources and their losses are relatively small
* Investigating and prosecuting them is a massive effort that strains the budgets of State AGs
* Finding culpable individuals in the organization and proving fraudulent intent is really difficult
I was actually surprised that the "account scandal" got sorted out like it did (CEO resigned, clawbacks of executive bonuses, etc). It probably had something to do with the actions being closer to actual criminal fraud.
Unfortunately I think we have two problems. One, we're a huckster culture, where we generally allow for fraudulent behavior as "good salesmanship".
The other is an economy with marginal broad growth which forces large companies to pursue more and more dubious income to make up for the lack of growth in their sector's organic income. In theory, banks should be natural profit centers -- if the economy is growing, they basically make a percentage off that growth through loans and money handling. But they face an economy with marginal growth and increased growth expectations, so they have to grind out these increases on the margins of their business.
It's neither legal not ethical for a company to"offer" services on an opt-out basis, but why does this rant focus on Wells Fargo (scummy though they also be)?
I see you just outed yourself as not reading the link, because had you done so, your question would have already been answered. So since you were too lazy to look, I'll do you a favor and summarize. Various Wells Fargo mortgage customers went over their monthly statements and found a mysterious charge (about $43 a month) for a service they never agree to or asked for, namely the home warranty from AHS. And when customers tried to get Wells Fargo to take it off their bills, they failed. So Wells Fargo fully participated in billing customers for a service they never chose to receive and that's why the rant focuses on them.
Wells Fargo for my mortgage for 10 years, AHS for about 7 years. I'm currently battling Wells against their attempts to foreclose on my home (for the second time) and I dumped AHS 3 years ago after I got a local consumer investigative reporter to contact them regarding fraudulent work their chosen AC contractor told me I HAD to pay for (new pad for a replaced AC unit when the old pad was fine, new wiring harness for same when the old was fine, etc). Wells had been okay with my incremental catch up payments for 6 months (I'm behind due to a recent divorce)...but last month I made the mistake of telling them I'll be current probably within 60-90 days...and 5 days later I got the "pay us now or we accelerate the loan to foreclosure by 8/23". I have the ability to do that so I will...but it pisses me off that a previously agreed upon plan was jettisoned when they understood that the late payment penalties are about to stop and they'll lose any legal chance to steal my home. Effing bastards. I can't recommend more strongly for any and everyone to avoid both these companies as if they were plutonium gonorrhea.