Tag: Wells Fargo

Robo-Signers – Not R2D2!

On By southwerkIn business ethics, Capitalism, ethics, Government Failure, Philosophy of Business4 Comments

In an article featured in ProPublica by Marian Wang, the phenomenon of signing foreclosure document without knowledge of the contents is discussed –

Last week, we noted that the discovery of “robo-signers” — employees who signed off on thousands of foreclosure documents without much, if any, knowledge of their accuracy — had caused Ally Financial’s GMAC mortgage unit to freeze foreclosures in 23 states where foreclosures require a court order.

You’d think that all banks using the practice would be humiliated and chastened by a practice that misinforms the court as to their actual knowledge of the mortgage documents. You would be wrong, big time wrong.

From further down in the article –

The Associated Press reported late Sunday that a Wells Fargo executive acknowledged in a May deposition that he had signed hundreds of foreclosure documents each week without verifying any information aside from the date. The company, nonetheless, told AP it had no plans to halt foreclosures and was confident of the documents’ accuracy. (As we’ve noted, other banks — including those that have chosen to halt foreclosures — have also expressed confidence in the accuracy of their documents and played down the likelihood of mistaken foreclosures, despite the flawed paperwork.)

See, Wells Fargo, knows its documents are correct without even looking at them. Now, that’s a crack staff! Errors are discovered in mortgage filings all the time but they don’t have any.

The site, Complaints Board, catalogs Wells Fargo mortgage complaints. ConsumerAffairs.com also lists Wells Fargo complaints. But don’t worry, they only verified the dates but all the rest needs no examination!

This is a pretty high level of arrogance particularly when the court is being presented unverified documents. They taught us in law school to be scared of judges. Wells Fargo is apparently unaware of this basic rule. Telling judges you have verified data you have not could get them in the fining and contempt citation mood not even mentioning that throwing the case out of court thing.

Let’s see what happens next. I’m betting they can’t keep the practice of robo-signing up.

James Pilant

Wells Fargo Ordered To Pay 203 Million Dollars In Fees

On By southwerkIn business ethics, Capitalism, ethics, Philosophy of Business1 Comment

Wells Fargo is one of the four largest banks in the United States. The bank received 25 billion dollars in TARP money (the bailout). But the bank charged 203 million dollars in overdraft fees since 2001 in violation of the law. They made their money by paying out checks and card fees largest to smallest instead of in the order they were received. This enabled the bank to stack overdraft fees.

Federal judge William Alsup described what the bank was doing as “unfair and deceptive business practices.”

He ordered the bank to pay back the 203 million dollars they made using the practice of largest to the smallest.

Here’s a news story reporting the decision –

I love irony, the irrational collision of one situation with another – and for that irony lets look at

Wells Fargo’s Vision Statement –

“We want to satisfy all of our customers’ financial needs, help them succeed financially, be the premier provider of financial services in every one of our markets, and be known as one of America’s great companies.”

Apparently manipulating the order of payout to artificially increase the number of overdraft fees “helps consumers succeed financially.”

Here’s a very different take on overdraft fees –

Are all overdraft fees always unfair? Of course not. If there was no penalty the banks would be faced with an avalanche of bouncing checks. There are many defenders of banks who say they are justified. Wrong! That’s not the question. If you only ask it one way, that is, should banks be able to charge overdraft fees, the argument always goes to the bank. But the question here is “are the fees reasonable.”

What does it cost a bank to process an overdraft?

Why doesn’t the bank charge based on the size of the overdraft rather than charging the same for $1.25 overdraft as for a much larger amount?

How much money does the bank make on overdrafts?

When you start looking at the facts, it becomes a messy problem. There are a lot things to figure in to the situation. Nevertheless, Wells Fargo’s practice is simply unfair.

There are other banks that use the practice. Will they be forced by the courts to payback the fees as well? Wells Fargo is appealing the decision. Stay tuned. I’ll tell you how it comes out.

James Pilant