Break the Law, Get off Easy - Welcome to the World of Wells Fargo
Wells Fargo is the poster child for several things. First, they are the poster child for corporate abuse of their customers. The list is a mile long of abuses. Second, they are the poster child of what is wrong with the system. There is no consequences for their actions. Let's take a look at two acts of fraud:
(1) Opening up Unauthorized Accounts in Customer's Name (said another way: identity theft/fraud)
My business partner received this in an email as to the settlement that he might receive being a Wells Fargo customer:
Last year, we sent you an email letting you know that, as part of our commitment to make things right, Wells Fargo entered into a $142 million class action settlement fund related to the opening of unauthorized accounts. Today, we are writing to let you know that the deadline to submit a claim with the fund has been extended to July 7, 2018.
If you believe Wells Fargo opened a checking, savings, credit card, or line of credit account for you without your permission, or if you purchased identity theft protection from us, you may be entitled to compensation from this fund. If you submit a claim, you may be eligible for reimbursement of fees, compensation for potential impact on your credit, and an additional cash payment based on any money remaining in the fund after benefits and costs are paid out.
So, the bank sends out this email. I figure that the proposed fraud victims fall in the following categories:
- They didn't actually get the email - it went into spam
- They received the email and didn't understand it
- They will miss the deadline
- They successfully submitted a claim
I would suspect that the smallest percentage would be the 4th category. Regardless it appears that Wells Fargo is out the 142 million dollars. That compared to the billions they make in a single quarter is nothing but a slap on the hand. How about sending someone to jail for fraud?
(2) I billion dollar fine for auto and mortgage loan abuse
Remember when Dr. Evil, in the movie Austin Powers, told the government that they should pay him 1 million dollars or he will blow up the planet? The government laughed at him because Dr Evil thought that was a lot of money, when in reality that was nothing compared to what the government spends on coffee (admit it you visualized Dr Evil saying 1 million dollars and holding his pinkie finger up to the corner of his mouth). Now, 1 billion dollars sounds like a lot of money. Truth is, it barely makes a dent in their profits on a quarterly basis. Also, wouldn't the crime for opening unauthorized accounts be worst than that of loan abuse? Go figure - still no one goes to jail for their participation in a crime that you or I would see jail time for committing.
Fining corporate America for fraud and unethical activities doesn't solve the problem. Mainly because they continue to do it even after being fined. This isn't the first time a big bank has been fined. Seems to me the problem points back as always to the politicians who write the laws. I guess it pays to be a part of the good ole boy club.