Posted on 02/22/2008 12:21:14 PM PST by RKBA Democrat
RIP-OFF ALERT: A well-respected bank with a huge national presence has been involved in a criminal enterprise. There were little inklings of this last year, but now The New York Times has released internal Wachovia memos that show the company aided and abetted criminal rings in stealing from people's checking accounts. In the interest of full disclosure, Clark wants you to know that he owns stock in Wachovia. It's one of the few non-index or mutual fund choices he has in his portfolio. As a stockholder, he's embarrassed and outraged by this news. Worse still is the fact that federal banking regulators are sleeping on the job -- they first discovered this scam 3 years ago.
Criminals know how easy it is to present a draft against an account and steal the money. The banking industry has no security against such drafts. So criminal rings were drafting people's accounts and hoping the customers wouldn't notice. There are systems in place where if too many disputes arise, it triggers a probationary hold or the loss of drafting privileges. But Wachovia kept allowing the drafts even after the alarms went off. Internal memos show employees knew they were dealing with criminal activity in 500,000 cases -- but the fee income was too large for them to care.
Wachovia has issued a statement saying they've now resolved the issue. It's great if that's true. But this scam has been going on at 9 banks and Wachovia was the only one named. Consumers Union has already detailed the cozy relationship between bank regulators and banks; regulators see themselves as protecting the banks! So here's what you need to do: Check your bank and credit card statements every month, line by line. If there's a charge you don't recognize, question it.
ALSO in today's shownotes:
Vanity organizations push
X10 can help cut down on your cable/satellite bill
Auto insurance rates poised to take a hike
Wow...if this is true, you could see Wachovia going down hard with federal investigations.
Large national banks are nothing but legalized mafias.. the sooner and faster they fall the better off everyone will be.
Citi looks like they are going to be the first... hopefully many more will follow.
Couldn’t happen to a nicer bunch of banksters. If they go down, there will be a lot of crying in Charlotte.
Without having heard the show but having heard a little about this, from what I understand, the people who were having their accounts drafted authorized the drafts.
bump
I bank at a small community bank where the president is my neighbor. It’s amazing how much nicer a bank relationship is when the bank’s ownership and management has to see you and be able to look you in the eye in the grocery store.
And this sort of fraud can still happen if you're with a credit union. The simple solution is to visit your local branch and place an ACH debit block with only certain debits allowed, e.g. for bill payments, certain electronic check conversions, and so forth. And, let your financial institution know the exact range of checks you have (preferably by ordering directly through them) and ask them not to pay checks that are not in that range.
Either way, stay vigilant, and watch your account regularly to catch fraudulent or simply erroneous transactions. This applies to all of you, regardless of whether you bank with Wachovia, Citibank, Bank of America, Navy Federal, USAA, or any other U.S. financial institution.
Wachovia allowing illegal drafts from checking accounts (Clark Howard Show)...
hope they are fined into bankruptcy....and they can take bank of america with them!!!!!
Now that was dumb. The customer was stupid, and so were the Wachovia employees. But, hey what else can you expect when you pay your tellers only a few bucks above minimum wage?
Thanks in advance.
I like the Clark Howard Show. Especially the segment about making one ply toilet paper out of two.
People have to be told to do this? I learned to do this when I opened my first checking account when I was barely in my teens. If people don't keep track of their accounts I can imagine a lot of money leaking out.
For the first twenty or so years my monthly statement was a copy of the daily transactions to and from my account. Every statement I received showed bank errors that they caught and corrected. There were also a few errors that I caught and had them correct. I'm sure the same happens today but I don't get to see all of the activity.
Its usually the other way around though.
Getting to sit with him for an hour before he was brought out to the public was a great experience. Was pretty much just his nonstop telling us about he most recent deals. Like how he just needed a new pair of glasses and he got them for $9 online. He passed them around for us to inspect.
I work in back-rooms of institutions very similar to yours everyday across the country.
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