Another BIG BANK Sticking it to the Elderly

 

From the Wall Street Journal…

Wachovia to Pay $144 Million To Settle OCC Investigation

By DAMIAN PALETTA and DAVID ENRICH
April 25, 2008 10:53 a.m.

WASHINGTON — Wachovia Corp. agreed to pay up to $143.9 million to settle a government investigation into its relationship with telemarketers that allegedly harmed thousands of customers, including the elderly, the Office of the Comptroller of the Currency announced Friday.

Part of the settlement includes an agreement to pay up to $125 million in restitution payments to consumers harmed by the practices.

The agency, which is a division of the Treasury Department, estimated that “thousands of consumers, many of whom were elderly” were harmed by schemes involving remotely created checks, which are checks that do not have an accountholder’s signature. The OCC said the “bank profited from these activities in the form of fees collected from and balances maintained at the bank by the payment processors and telemarketers.”

The agreement requires Wachovia to pay a $10 million fine and contribute $8.9 million to consumer education programs focused on the elderly.

“This situation was unacceptable and we regret it happened,” a Wachovia spokeswoman said. “We will work diligently to provide restitution to consumers affected by the situation and to educate consumers.  Wachovia is pleased to have resolved this matter with the OCC.”

The spokeswoman said the bank had already accounted for the penalties and that it would not have “a material adverse affect on our financial condition.”

The OCC said the settlement culminates an 18-month investigation. The regulator is also requiring Wachovia to create new policies and procedures with respect to remotely created checks and telemarketers, among other things. Wachovia said it has already made changes to its policies. For example, the bank’s new policy is not to do business with companies that are strictly telemarketers.

Charlotte-based Wachovia is one of the country’s largest banks, with more than $800 billion of assets. Like many of its peers, the bank has come under pressure during the global credit market turmoil and earlier this month cut dividends and raised $8.05 billion.

 

 

 

Meet the new boss…Same as the old boss!

Why people allow internally, by nature, conflicted companies to manage their money is beyond me!

 

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