Wells Fargo Identity Theft Scandal Spreads to Prudential Life Insurance
- December 10, 2016
- Joel Winston
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Wells Fargo employees are accused of stealing the personal and financial information of Wells Fargo customers and forcing them to buy life insurance. Wells Fargo has a partnership with Prudential to sell a low-cost life insurance policy to the bank’s retail customers.
Wells Fargo employees targeted Hispanic customers in California, Texas, Arizona, and Florida. All Wells Fargo customers are urged to immediately check their bank statements and life insurance credit reports for evidence of identity theft.
Wells Fargo Identity Theft Scandal
Wells Fargo’s sales practices have been under a spotlight since September when regulators ordered the bank to pay $190 million in fines and restitution to settle charges that its employees opened as many as 2 million deposit and credit card accounts without customers’ permission.
Prudential has worked with Wells Fargo since 2014 to sell the term insurance policy, known as MyTerm, to the bank’s retail customers. New revelations in the Wells Fargo identity theft scandal uncovers Wells Fargo employees using customer identities to buy fake life insurance coverage from Prudential Insurance Company.
Wells Fargo employees were meant to direct customers to either self-service kiosks in branches or online to buy the insurance, without getting into specifics about the products because bankers are not licensed to sell insurance.
Prudential Insurance Investigates Wells Fargo
After news of the Wells Fargo settlement in September, Prudential ordered an internal review of its dealings with the bank, to make sure nothing was amiss with the joint endeavor.
A lot was amiss. According to three former managers in Prudential’s corporate investigation division, Wells Fargo employees appeared to have signed up bank customers for Prudential insurance without the customers’ knowledge or permission. In some cases, they even arranged for monthly premium fees to be withdrawn from their customers’ accounts.
When investigators reviewed tapes of calls to Prudential’s customer service line, they found complaints from Wells Fargo customers about policies they did not remember buying. Many of the customers did not speak English and needed a Spanish interpreter, the three plaintiffs said. Preliminary estimates show that 15,000 MyTerm accounts that were sold through Wells Fargo.
Wells Fargo Employees Make Up Fake Information to Apply for Insurance
Those in the unit found that some customers who signed up for MyTerm listed addresses like “Wells Fargo Drive” on their applications, according to the complaint. Some of the policy applications listed suspicious email addresses for customers, and the name listed on a policy sometimes did not match the name in the customer’s email address — “for example, where the MyTerm policy holder was Jason Smith, the email address might be for email@example.com,” the complaint said.
Additionally, the lawsuit said, “Cellphone numbers were listed as emails, such as firstname.lastname@example.org, which was very similar to how fraudulent bank accounts were opened at Wells Fargo Bank.”
Wells Fargo Targeted Hispanic Customers in California, Texas, Arizona, and Florida
The MyTerm policies were “sold predominantly to individuals with Hispanic-sounding last names concentrated in Southern California, southern Texas, southern Arizona and southern Florida,” the lawsuit states. Those four states also accounted for the bulk of the sham accounts created by Wells Fargo’s employees, according to the bank’s disclosures.
An unusually high rate of the Prudential policies that Wells Fargo sold in its first year had lapsed — 70 percent — and many were dropped after only one or two months. In some cases, customers never made a single premium payment.
There was also a suspicious pattern of MyTerm policies being closed and reopened, suggesting the unseen hand of a banker trying to buoy sales numbers. For example, “18 clients who purchased the MyTerm policies allowed them to lapse, or they were canceled and then repurchased them two more times,” the lawsuit states.
A former Wells Fargo employee said the bank made no secret that it wanted employees to push various insurance products.
“We were like insurance salespeople without the license,” said Michael Barborek, a former Wells Fargo banker in Orange, Tex. “They wanted us to offer it to everybody who came in.”
Wells Fargo Employees Bought and Cancelled Fake Life Insurance Policies
To meet their sales goals, some bankers in his branch would sometimes buy cheap policies for their friends and relatives, pay the first month’s premium and then cancel, according to Mr. Barborek — a blatant violation of regulatory rules and Wells Fargo’s own policies. Managers, facing their own pressure to make numbers, looked the other way, he said.
The life insurance product is quick and easy to buy: A customer can complete the application in 15 minutes by answering a few basic medical questions online, without ever speaking to a licensed insurance sales agent. Prudential then, with the permission of the applicant, checks databases, such as pharmaceutical records, to assess the health of an applicant before deciding to issue a policy. The average annual premium is $288.71 for a policy sold through Wells Fargo, which continues to offer MyTerm.
Wells Fargo Customers Should Contact an Attorney
All Wells Fargo customers must immediately check their bank statements and life insurance credit reports for evidence of identity theft. Wells Fargo customers can contact the Winston Law Firm for a free, confidential attorney consultation.