Wells Fargo’s Credibility Sinks Deeper into the Hopeless Well of Despair
Wells Fargo once had a sterling reputation, known for stability and being conservative with risk. Everything changed with the 2008 financial crisis. Today Wells Fargo’s poor, fraudulent and illegal banking practices and corporate culture have come to light, however, just when a reasonable person would think it cannot get any worse, Wells Fargo finds a way to sink deeper and deeper into the hopeless well of despair.
Unauthorized Deposit and Credit Card Accounts
In September of 2016, the Consumer Financial Protection Bureau (“CFPB”) announced that Wells Fargo conducted the widespread illegal practice of secretly opening unauthorized deposit and credit card accounts. Motivated by sales targets and compensation incentives, employees boosted sales figures by secretly opening accounts and funding them by transferring funds from consumers’ authorized accounts without their knowledge or consent, often racking up fees or other charges. Wells Fargo was ultimately fined $185 million for this illegal activity. The Consumer Financial Protection Bureau received $100 million, the Los Angeles City Attorney received $50 million, and the Office of the Comptroller of the Currency received the last $35 million. Further, Wells Fargo fired approximately 5300 employees as a result of the fraudulent sales and ended its sales quotas at its individual branches.
Improper Changes to Residential Mortgage Loans
In June of 2017 Wells Fargo was accused of making improper changes to mortgages of its borrowers involved in bankruptcy. The changes, usually lowered the borrower’s monthly loan payments, which at first glance one would think this would help borrowers. Under a more careful analysis it becomes crystal clear that these improper changes have a huge detrimental impact upon the borrower because the terms of the loan are extended for many years, sometimes decades, meaning the borrower will have monthly payments for much longer and ultimately pay substantially more under the loan. The big issue here lies in the fact that these loans were within the jurisdiction of the Bankruptcy Court which requires any change to a payment plan for a person in bankruptcy to be approved by the Bankruptcy Court and the other parties involved.
Unauthorized and Unnecessary Auto Insurance Products
In July of 2017 it was revealed that more than 800,000 people who took out car loans from Wells Fargo were charged for auto insurance they did not need, and in some instances, consumers are still paying for it. The expense of the unneeded and unnecessary insurance products, which covered collision damage, pushed approximately 275,000 Wells Fargo customers into delinquency and resulted in approximately 25,000 wrongful vehicle repossessions. A repossession will wreak havoc on a person’s credit report, the impacts of this are still being felt.
Accidental Release of Sensitive Financial Information of Approximately 50,000 Customers
In July of 2017, Wells Fargo’s reputation was already reeling due to the illegal widespread practices that were discovered. However, Wells Fargo’s own counsel found a way to further worsen its credibility by releasing thousands of pages of highly confidential customer information. In a defamation lawsuit against a Wells Fargo employee, a former Wells Fargo employee subpoenaed Wells Fargo for documents concerning the case. Instead of receiving the requested emails and memoranda, Wells Fargo’s counsel provided 1.4 gigabytes of files including financial information, including customers names, social security numbers, the size of their investment portfolio and the amount Wells Fargo charged each customer. Even more troubling, it appears that the Wells Fargo attorney failed to have a protective order and/or written confidentiality agreement in place. Getting these in place is document production 101, it is as basic as it gets. Counsel for Wells Fargo indicated that this was an inadvertent disclosure. As a former bank attorney, I use to regularly handle sensitive document productions. There were always several layers with any document production, that served as checks and balances. From the bank, to the law firm, and then to actual production probably took about 10 layers to get through, this was frustrating and time consuming, however, it is necessary. It is abundantly clear that in this instance counsel for Wells Fargo did not have the necessary checks and balances and/or the checks and balances completely failed.
Steps Former and Current Customers of Wells Should Take
Review your credit report as soon as possible. Determine if there are any accounts that you do not recognize. If there are questionable accounts then seek the assistance of a professional to assist you in analyzing them.
Review your bank statements carefully and be able to determine where/why all of the fees are being assessed.
If you are in bankruptcy and have a Wells Fargo mortgage clarify whether any amendments have been made to the mortgage.
If you took out a car loan with Wells Fargo carefully review all of the insurance products that have been purchased for the subject vehicle.
Sweeney Law, P.A. Regularly Represents Individuals Against Banks
Brendan A. Sweeney, Esq., of Sweeney Law, P.A., The Florida Debt Warrior, regularly represents individuals that have had their consumer rights violated by banks and other financial institutions. Brendan A. Sweeney, Esq., has been recognized as a Florida Legal Elite Rising Star Attorney in Consumer Law in 2014, 2015, 2016 and 2017, and is a member of the National Association of Consumer Advocates. If you are a current or former customer of Wells Fargo then please contact Sweeney Law, P.A. at 954.440.3993 immediately to protect your rights. www.sweeneylawpa.com