Wells Fargo’s troubling practices

For years, Wells Fargo created millions of fake accounts for its customers by putting enormous pressure on its employees to increase the number of customer accounts. After the scandal broke, Wells Fargo responded by firing 5,300 of its employees, and its then-CEO resigned. Both the CEO and the Wells Fargo executive who headed the fake accounts unit, however, walked away with millions.
When consumers have risen up and filed class actions for these fraudulent practices, Wells Fargo has added insult to injury by trying to force them to arbitrate their claims, even after being called out by members of Congress.

Wells Fargo has repeatedly been sued for engaging in discriminatory lending practices. On allegations by the U.S. Department of Justice, Wells Fargo agreed to pay $125 million to more than 30,000 borrowers the government had found were steered into subprime mortgages or who paid higher fees and rates than non-Hispanic white borrowers because of their race or national origin. The cities of Sacramento, Philadelphia, Baltimore, Miami and Oakland have sued the bank for discriminatory lending practices.

And what happens when Wells Fargo employees try to do the right thing by their customers and blow the whistle on the bank’s practices? According to a number of lawsuits, Wells Fargo has responded by firing staff. This article, about a former Portland-based Wells Fargo whistleblower, is worth a read: https://www.nytimes.com/2018/03/24/business/wells-fargo-whistleblower-duke-tran.html.

Beyond directly harming consumers and their own employees, however, Wells Fargo has engaged in a breathtaking display of other unfortunate practices that disproportionately impact low-income communities:

* financing projects that exacerbate climate change like the Keystone XL pipeline and oil sands development;

* arranging more financing for gun makers than any other bank; and

* extending hundreds of millions of dollars to for-profit private prison companies.

. . . The Federal Reserve, for one, does not share [this] laissez-faire attitude. In an unprecedented move, it has prevented the bank from growing until it sufficiently improves its governance and controls.

Numerous entities have divested from Wells Fargo. The State of California. The State of Ohio. The cities of Portland, Seattle, Davis and Santa Monica, California. The University of California. The Nez Perce Tribe.

Introduction to the WA Post story on service contracts (sometimes wrongly called "extended warranties")

Cost of a three-year extended warranty for a dishwasher: $157.97.

Average cost of a dishwasher repair: $159.

The fact that service contracts often cost about the same as a repair is just one reason extended warranties — also known as service contracts and protection plans — are hardly ever a good deal. After all, what if you never need a repair? Then that’s $157.97 you didn’t have to spend.

“You can insure your life against every possible calamity, but you’ll go broke in the process,” said Anthony Giorgianni, associate finance editor at the nonprofit Consumer Reports. “You are paying for something in advance with the hope that they’ll cover you when something goes wrong, but you may not need the service, or it may not be available.” ...

Read the rest

When you co-sign for a student loan, you are not the backup borrower. You are on the line for the entire loan balance should your grandchild not pay.

When seniors default on federal student loans, their Social Security benefits can be docked to repay the debt. As much as 15 percent of your benefit payment can be withheld. If there is a silver lining, it’s this: Your Social Security benefits can’t be dunned for defaulting on private student loans. But the lender can still take you to court to try to collect the amount due.

Read more: Can Student Loan Debt Eat Up Your Social Security Benefits?

“The number of people over 60 struggling with college student loans is snowballing,” reported Gail MarksJarvis for the Chicago Tribune. “For most, the struggle is not a hangover from their own college days. Rather, the strain is coming from helping their children and grandchildren pay for college.”