Wachovia To Pay $144 Million For Bilking "Gullible" Seniors

Wachovia will pay $144 million for helping telemarketers prey upon the elderly. The Office of the Comptroller of the Currency spanked the morally bankrupt institution with one of the largest fines ever levied—but before seeing a penny of settlement money, seniors will need to fill out detailed claim forms and navigate a complex bureaucracy.

Under the scam, telemarketers called unsuspecting seniors and pretended to update their Social Security or insurance information to knock loose private financial details. The scammers then used that personal data to write themselves $142 million worth of unsigned checks, which Wachovia gladly cashed.

Upon learning that one scammer’s account received 4,500 complaints in a two-moth span, one Wachovia executive wrote in an email: “YIKES!!!! DOUBLE YIKES!!!! There is more, but nothing more that I want to put into a note.”

Though Wachovia did not admit or deny wrongdoing, the investigation found that Wachovia, one of the country’s largest banks, engaged in unsafe practices — failing to conduct suitable due diligence, failing to monitor accounts used by telemarketers and failing to follow normal procedures that would probably have uncovered the thefts.

The bank’s actions were “part of a pattern of misconduct” that resulted in Wachovia’s collecting millions of dollars in fees, regulators wrote.

Wachovia has agreed to pay a $10 million fine, contribute $8.9 million to consumer education programs and make restitution to victims that could top $125 million. In a statement, the bank said this “situation was unacceptable and we regret it happened.”

The settlement won’t affect a class action from fraud victims, or a potential criminal case from the U.S. attorney’s office.

Disturbingly, the government hasn’t tackled unsigned checks, the root cause of this pernicious scam.

In 2005, attorneys general of 35 states urged the Federal Reserve to end the unsigned check system. But the Federal Reserve demurred.

“We really need these unsigned checks to be prohibited completely,” said Mr. Miller, the Iowa attorney general. “There’s still a lot of work to be done.”

Big Fine Set for Wachovia to End Case [NYT]
PREVIOUSLY: infoUSA Marketed Lists Of “Gullible” Seniors To Known Scammers, Wachvoia Processed The Unsigned Checks
Internal Docs Prove Wachovia Knew About Telemarketer Rip-Offs All Along
(Photo: Getty)


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  1. vastrightwing says:

    Taking advantage of customers? Wachovia? I’m sure this was a rogue manager and that this was not part of Wachovia’s plan. Upper management will no doubt take this very seriously and make it up to all the customers who were taken advantage of. NOT! They’ll deny any wrong doing, lie about it, pay lawyers millions to defend their actions, find some fall guy in the organization to fire, accuse government regulations for not working and customers for being stupid enough not to know how scummy banks are.

  2. bben46 says:

    Until they start putting executives of these companies in jail it will continue. If the customer rips off the bank,its called fraud or robbery. If the bank rips off the customer, its called business as usual. I suppose the CEO of Wachovia will still get his multi million ‘performance’ bonus instead of the jail time he deserves.

  3. azntg says:

    Looks like the truly responsible party doesn’t even have to “take it seriously.” Not only do they not even get a slap in the face, they probably won’t have to pay up out of pocket!

    I doubt they’ll even try to make bona fide attempts to correct past injustices.

    Targeting the elderly (and by extension, the disabled) makes me sick. I don’t care what or how they bilk them. It is wrong any way you see it. But if the likes of them touch anybody I know, including family, friends and neighbors… I’ll be coming after you and you won’t get away without some form of hurt!

  4. tlpintpe says:

    We are caring for an aged parent with alzheimers and I can tell you that this kind of crap happens all the time (companies preying on seniors). It is a sick practice.

  5. Trai_Dep says:

    Clearly the customer’s fault since they lived too long. The nerve!

  6. Jaysyn was banned for: https://consumerist.com/5032912/the-subprime-meltdown-will-be-nothing-compared-to-the-prime-meltdown#c7042646 says:

    Well now. Looks like it’s time for me to switch banks.

  7. DoubleEcho says:

    Well, at least it was only a 2 moth span. Couldn’t be that BIG of a deal!