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Businesses The Almighty Buck

Online Critics Decry Even More Wells Fargo Fraud Scandals (boingboing.net) 213

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.
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Online Critics Decry Even More Wells Fargo Fraud Scandals

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  • by Z00L00K ( 682162 ) on Monday August 14, 2017 @03:46AM (#55006449) Homepage

    The habit of having a "negative agreement" where you have to check a box and send back if you don't want a service is not legal in some areas.

    • by Anonymous Coward on Monday August 14, 2017 @03:51AM (#55006459)

      I'm surprised that they're legal *anywhere*.

      • They can be legal if you previously signed an agreement agreeing to them. e.g. Credit card company changes its terms. Sends you a letter describing the changes and says by continuing to use the card you agree to the new terms. And if you don't agree to the changes, stop using the card and call them to tell them you're cancelling the card.
    • by skovnymfe ( 1671822 ) on Monday August 14, 2017 @03:59AM (#55006475)

      There’s no point in acting surprised about it. All the planning charts and demolition orders have been on display at your local planning department in Alpha Centauri for 50 of your Earth years, so you’ve had plenty of time to lodge any formal complaint and it’s far too late to start making a fuss about it now What do you mean you’ve never been to Alpha Centauri? Oh, for heaven’s sake, mankind, it’s only four light years away, you know. I’m sorry, but if you can’t be bothered to take an interest in local affairs, that’s your own lookout. Energize the demolition beams.

      I'm not entirely sure how this quote applies to the situation described in the article, but if we make the effort I'm sure we can find a way.

    • by Orphis ( 1356561 ) on Monday August 14, 2017 @06:20AM (#55006775)

      Where is it legal? Asking for a friend and his company with the amazing monthly paper clip delivery service that's just $999 a month.

    • by Tablizer ( 95088 )

      I see that on just about any "free" software installation and update to get you to install extra "promotionware". Java still does it, last I remember. I suppose they can argue the "extra" product is not being charged for and thus does't fall under such statutes; and the boundary between product and "feature" can also be blurry. Still, it's an annoying practice.

      The worse case I ever saw was a confirmation box with a double-negative, something like:

      [_] I don't want to not install the ShinyMonkey Toolbar.

      Hal

    • Where IS it legal?

      And how much did they have to bribe the corrupt state legislature to make it legal?

  • by Anonymous Coward on Monday August 14, 2017 @04:55AM (#55006607)

    Why these recidivist fuckers aren't in jail ? Is that because they're WASP ? Is that because white collar crimes actually pay well ? Where the God damn fuck is justice in all of this ?

    • by Anonymous Coward

      Not because they're WASP, but because they're RICH.

    • Re: (Score:2, Informative)

      by Anonymous Coward

      Why these recidivist fuckers aren't in jail ?

      Because they're "too big to fail".

      Where the God damn fuck is justice in all of this ?

      If you have to ask, you can't afford it.

    • by swb ( 14022 ) on Monday August 14, 2017 @06:39AM (#55006825)

      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 because we as a society have decided that money is less important than people. On the one hand this means that a company owner isn't justified in putting workers' lives at risk just to make more money. On the other hand, it means the punishment for a financial crime is less than the punishment for physical crime. e.g. The majority of the punishment for bank robbery isn't because you stole money, it's because you threatened people with violence during the act of stealing money.

        You can't have it bo
      • Investigating and prosecuting them is a massive effort that strains the budgets of State AGs.

        Arrest them under state law. Deny bail, delay any action after the bail hearing to keep them in jail as long as possible. As soon as some other level of government springs them from jail, rinse and repeat on new charges.

        A sufficiently aggressive AG and a few good judges are about all that's really required. Nobody, even a CEO, likes being in jail, and hammering home the message that your money can't keep you safe f

    • by hwstar ( 35834 )

      In other words, Wells Fargo is a parasitic corporate entity who have perfected the art of living off their customers without providing any significant value for money.

  • Contract Crapware (Score:4, Interesting)

    by mentil ( 1748130 ) on Monday August 14, 2017 @05:21AM (#55006659)

    Sign a contract for service X, get unwanted service Y in addition slipped into the hundreds of pages of legalese. Who's going to refuse to sign mortgage papers over a $43/month bullshit charge? Especially if it's a contract of adhesion and you can't just cross it out? It's like crapware that comes preinstalled on a name-brand computer, they get a kickback for each install. Remember: it's not fraudulent fees and penalties, it's "innovative financial services."

    • Frankly not many. I knew a woman who was positive she signed a fixed rate mortgage when in fact she discovered after 2 years was variable. But, there are people like me. I was signing for a house and they slipped in the house inspection showed the roof needed to have some work. Wasn't much, like 400 or 500. I was like WTF, where did this come from, why was I not informed earlier? I said I was not going to proceed, cancel. Suddenly both realtors went into panic mode and said they would pay for the work out o

      • You aren't alone. I thought the realtors were going to stroke out when I started reading the contract instead of just signing it. They were quick to offer to explain it to me, then seemed a little more nervous when I told them that it wasn't a problem, I used to work for the state bar, I can read legalese just fine.

        I found a few things that seemed strange, got some language changed and a full repair to the AC done by them before anything was signed.

        More people should read their contracts over before signi

  • by Entrope ( 68843 ) on Monday August 14, 2017 @06:03AM (#55006735) Homepage

    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)?

    American Home Shield is not owned it operated by WF. It is owned by the same company that owns Terminix, Merry Maids, and some other brands. When you buy a house, the transfer is a public record in most places, and you absolutely will get a lot of junk offers from companies who have no relationship to any of the ones you used.

    • 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)?

      American Home Shield is not owned it operated by WF. It is owned by the same company that owns Terminix, Merry Maids, and some other brands. When you buy a house, the transfer is a public record in most places, and you absolutely will get a lot of junk offers from companies who have no relationship to any of the ones you used.

      Wells Fargo is mentioned here because they chose to continue to do business with a company that does not operate a service legally or ethically, as you pointed out.

      And let's call "junk" offers what they should be called; illegal. There's a reason scam is a legal term, and not just a word found in the urban dictionary.

      • Not all junk offers are illegal. I already said that if the company did what the summary described, it was illegal. What more do you want?

        • by geekmux ( 1040042 ) on Monday August 14, 2017 @08:32AM (#55007165)

          Not all junk offers are illegal.

          My point is perhaps they should be. And until you can clearly define the difference between a scam and a "junk offer", perhaps we should get rid of the latter bullshit term and call it what it is.

          I already said that if the company did what the summary described, it was illegal. What more do you want?

          From TFS:

          "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."

          There's certainly more than one reason Wells Fargo was called out here. Commonly referred to calling a spade a spade. What more do I want? Shutting down unethical and corrupt businesses would be a refreshing start. Either that, or get rid of laws that define ethics in business; we obviously ignore the shit out of them anyway.

    • by Zontar_Thing_From_Ve ( 949321 ) on Monday August 14, 2017 @08:09AM (#55007083)

      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.

    • When you buy a house, the transfer is a public record in most places, and you absolutely will get a lot of junk offers from companies who have no relationship to any of the ones you used.

      Mailboxes are getting useless. Currently almost all of my important mail goes to a post office box because I have had problems with identity theft from stolen mail. When I got involved in elder care with my parents and my Dad kept misplacing important mail, I filed a forwarding with the post office; the ONLY mail that go

  • by geekmux ( 1040042 ) on Monday August 14, 2017 @07:55AM (#55007029)

    "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."

    Lists of blatantly corrupt and illegal activities don't mean jack shit unless you do something about it.

    And by do something, I mean shut them the fuck down, and throw executives in prison.

    Since Greed N. Corruption took over as CEO of US Capitalism, Inc. that will never fucking happen.

    How ironic that if any US citizen did this, it would be labeled terrorism. The fact that nothing is ever done only clarifies just how unethical and corrupt the Banking Industrial Complex has become.

    • by sl3xd ( 111641 )

      Lists of blatantly corrupt and illegal activities don't mean jack shit unless you do something about it.

      Taking your business elsewhere is often futile.

      When I got a mortgage, I went out of my way to avoid Wells Fargo. The dirty secret in getting any loan is that the guys offering the loan (ie. the bastards at the credit union, etc.) can sell the debt to another institution before the ink dries.

      Which is how I became another "satisfied" customer of the institution I tried to avoid.

  • We bought a house and the seller paid for a year of a home warranty service. So far, we have had plumbing snaked out, The garage door repaired, and our dishwasher replaced, free of charge.
    • by DigiShaman ( 671371 ) on Monday August 14, 2017 @08:53AM (#55007241) Homepage

      Motherfucking worthless when the AC compressor dies! Mine was covered under the home warranty, but because it used the old older R22 system (which I'm sure at least 95% of Americans are still using), they couldn't, or rather, wouldn't replace it for an R410a system. One, can't get new-old stock compressor, and two, they wouldn't cover the entire labor of flushing out the lines and replacing the the evap coil that goes with it. I even stated I would meet them half way if they at least replace the compressor and labor for just that part, and I'd pay for the flushing and coil. NOPE! They couldn't warranty it based on that.

      So here's the deal. If you have an R22 system, and you bought home warranty, chances are you got royally fucked. They will NOT take the 5 grand hit for the mandated chuck and replace to be federally compliant with R410a system.

      Hope you boys and girls have a nice little nest egg saved to replace your AC when it dies (because they all do eventually). Otherwise, I need to invest in company stock that builds window units. Holy shit!

      • We lucked out... they applied the cost of the compressor and labor to replacing the whole thing. Didn't end up much out of pocket.
      • House had both a 3 year old air conditioner and roof, which was a buying point for us.
      • by eth1 ( 94901 )

        Hope you boys and girls have a nice little nest egg saved to replace your AC when it dies (because they all do eventually). Otherwise, I need to invest in company stock that builds window units. Holy shit!

        IMO, a responsible homeowner will keep about 10% of the value of their home in cash or easily liquidated assets in order to handle this kind of maintenance. You need to put away about 1% of the value per year whether you spend it or not that year. That's about what it averages out to, but it tends to come in inconveniently large hits when it needs to be done. I have very little sympathy for someone who buys a house, and doesn't plan ahead for this sort of thing.

        For AC replacement under a home warranty, you'

    • by sl3xd ( 111641 )

      We bought a house and the seller paid for a year of a home warranty service.

      The seller "paid" out of the money you gave them.

      I also was "gifted" a "home warranty."

      Every single problem I encountered was judged a pre-existing condition, and it was my fault for not noticing the problem during the home buying process. (This includes the garage door, microwave, HVAC system... all of which was functional during the home inspection)

  • With all the crap they've pulled, it's a miracle that the "Wells Fargo" brand is worth anything in consumer banking anymore. Any normal company would have rebranded/recolored itself long ago.
  • by ausekilis ( 1513635 ) on Monday August 14, 2017 @09:01AM (#55007265)

    Years ago I got mail from them regarding my credit card. I had been signed up for "Credit Defense", which WF charged some % of your monthly balance to put toward a pot that you could draw on should you be unemployed for a length of time. I didn't think much of it and didn't care because I didn't have a high balance.

    Fast forward a few years and couple moves later and my balance was a bit higher. To top things off, this charge was getting between $50 and $60 every month, which was making payments harder. Basically my story was a lot like this guys [reddit.com]. I called up WF, they told me to call this third party company. I call them "Sorry, I can't refund". So I broken record the assholes, "So send me to someone who can". A few people later and I can "file a complaint" or whatever their lingo was. They had to prove that I had signed a document allowing them to charge me. They couldn't, so I got refunded near $2k for my troubles. No bogus charges since.

    If it weren't for having my longest running line of credit with them, I'd have walked into a branch, shredded my credit card and given them the two finger salute years ago.

    • >

      If it weren't for having my longest running line of credit with them, I'd have walked into a branch, shredded my credit card and given them the two finger salute years ago.

      A peace sign? The Vulcan sign of prosperity?

      • by mark-t ( 151149 )

        I think he means by utilizing each hand, identically.

        But thank you for that... I can't recall the last time I saw a post on Slashdot that made me laugh that hard.

      • Perhaps GP is British?

        British version of the finger is traditionally given using two fingers.

  • I've had both (Score:5, Interesting)

    by Euroranger ( 5023923 ) on Monday August 14, 2017 @09:08AM (#55007281)
    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.
  • by andyring ( 100627 ) on Monday August 14, 2017 @09:41AM (#55007427) Homepage

    My son's school pictures arrangement is about like this too. Some company called Lifetouch contracts with the schools for school pictures. OK, no big deal, right?

    If only...

    So here's what they do. They herd the kids through the usual picture rigamarole and then a few weeks later, there is a proof image to look at and parents can decide which poses the want, right?

    Oh no. Not at all.

    A few weeks later, a full print set with all the usual sizes shows up in my son's backpack. A few 8x10s, some 4x6s, a bunch of wallets. Probably about the $25-30 package. Printed, ready to go, in his backpack. And Lifetouch puts a letter in there saying (paraphrased): "Hey mom and dad! Here are the wonderful pictures of your super cute kid! We already printed them for you, if you want to keep them just send a check back to the school. Or if you hate your kid and think he's ugly, send them back with a note to the teacher. Oh, and if you keep them and don't pay, we'll just kick your kid out of the photo line next year."

    And not to mention what happens if you do send them back. Who knows? I bet they don't actually get sent back to Lifetouch. My guess is a pile of crisp 8x10 photos with all the identifying information a sexual predator would want printed right on the envelope goes straight into the dumpster.

  • I don't know what the whole Wells Fargo/AHS scam is, and $43/month sounds low for a home warranty, but I do have AHS (about $70/month) and they've replaced my A/C, pool equipment, and a refrigerator. So there may well be a scam going on, but I'm not sure it's fair to brand AHS a "scam factory" outright.
  • I did not get AHS from a forgetting to check box, which is bullshit and Wells should be raked over the coals for that. I took the service when I purchased my place because of another friends positive experience with them.

    But I have successfully used them for the 10 years I owned my home.
    A/C issue in the heat of summer, multiple years, someone shows up in a couple of days and gets it fixed.
    Washing machine rebuild.
    Dishwasher fixed.

    AHS hold a lot of weight with their contracted vendors. They tend to be highe

  • I've had AHS for 5 years and I've always had a great experience. I've never had long hold times, been denied for service, or any other problems. I've had some expensive failures (Refrigerator had to have an evap coil replaced, furnace control board failed, and hot water heater failed), and they've always paid for the repairs, done so in a timely manner, and held up their end of the contract.

    I'm not sure what the Wells Fargo contract covers (possibly not much?), but they've always provided good service
  • That it isn't just Wells Fargo doing this, it's all the big and regional banks doing similar tactics. From Chase, Bank of America, Citizens, Santander, etc. Some to a lesser degree of evil than others but they do it anyhow.

    Why is that? Because they know they've managed to completely weaken any regulatory actions.
  • I had AHS for a few years. They always came out promptly when I called, and did the repairs. The problem was that they always found "non-covered expenses" that ran up my bill into the hundreds of dollars, instead of the claimed $50 co-pay. Examples included coolant evacuation and recharge for $400, and a concrete condenser pad for $150. When my condenser went out, my total non-covered expenses were $900!

    Later, when I dumped AHS and started paying for my own repairs, I discovered that my A/C contractor didn'

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