People across the globe rely on banks to store their hard-earned money. Though you expect your bank to be transparent, greedy practices lead to massive scandals that can impact millions of customers. In fact, some of the world’s leading banks have created scandals that hit national headlines – sometimes multiple times. If you are a customer of a national bank, you may have been a victim of scandals and unsavory practices without your knowledge. Read on to see if your bank made the list.
Wells Fargo Caught Making Fake Bank Accounts in Customers’ Names
Banks, like any business, often push practices that increase profits. Unfortunately, Wells Fargo bank executives are no exception, propelling the company to the national spotlight over their scandals. Beginning as early as 2011, Wells Fargo executives pressured their bankers to cross-sell Wells Fargo services to existing customers. This pressure came down even harder as branches received quotas for new product sales. In order to avoid disciplinary action or even termination, individual bankers began using customer information to open new service accounts with Wells Fargo without permission. This fraud had a significant impact on their customers’ credit and trust. Oversight organizations caught on in late 2016, and the company was fined $3 billion in 2020.
Wells Fargo Charged Customers Unnecessary Auto Insurance Premiums
In a similar vein, Wells Fargo found itself in hot water again over charging unnecessary automotive insurance. When customers purchase a vehicle using a Wells Fargo auto loan, they must provide proof of auto insurance before Wells Fargo approves the loan. However, even if a customer had valid insurance, Wells Fargo lenders automatically signed them up for Wells Fargo auto insurance. This increased customers’ monthly payments significantly, forcing many to default on their loan.
Deutsche Bank Involved in Repeated Money Laundering Scandals
Deutsche Bank may not be a common consumer bank in the United States, but the scandals they have instigated hit close to home. Most notably, in 2011, Deutsche Bank’s stock traders began noticing suspicious activity between accounts in different regions of the world. These business accounts appeared to be mirroring each other’s stock trades, despite being owned by a common entity. For example, a Moscow-based business would buy stocks in rubles while a linked business in London would sell the same amount in pounds. In short, a single entity was stealthily transferring money from one country to another.
During a time when Deutsche Bank was struggling, every commission counted for stock traders, so no one asked questions when they noticed red flags. This money laundering transferred upwards of $10 billion over the course of four years. Much of it even went to paying nefarious groups and people in the United States, including drug cartels, mafia groups, and other shady organizations that impact everyday Americans.
Wells Fargo, Chase Bank, U.S. Bank, and Bank of America Accused of Favoring Profitable PPP Loans
The PPP loan program was intended as a lifeline to keep businesses afloat during the pandemic. Though the program faced many critiques over its poor implementation and planning, one of the most troubling allegations was that the consumer banks who were responsible for managing and distributing the loans, opted to fund only the largest and most lucrative businesses. Without funding based on order of application receipt, many small businesses were in danger of closing. A class action lawsuit is currently underway.
Representation in Financial Legal Matters Nationwide
The importance of the consumer bank does not preclude it from acting with transparency. When a bank is a participant in scandals and wrongdoing, it is the consumers’ responsibility to hold it accountable. At McCune Wright Arevalo, LLP, our Financial Services attorneys have a successful track record of litigating against some of the largest corporations, including a $203 million verdict against Wells Fargo itself.
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unscrupulous bank practice or have
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