Money And Change

Wells Fargo Slammed in Customer Suit Over Account Abuses

Laura J Keller LauraJKeller      Bloomberg.com

Wells Fargo & Co. was sued by customers in what may be the first of many lawsuits to come after disclosures that employees created unauthorized accounts to boost the bank’s fees.
Three Utah customers sued the bank Friday in federal court, blaming the scandal on the lender’s push to increase the number of accounts held by clients to an average of eight -- its “gr-eight” initiative. That strategy led to customers’ money being transferred without their authorization to accounts created without their knowledge, and then the bank charging fees on those accounts.
“Wells Fargo quotas are difficult for many bankers to meet without resorting to the abusive and fraudulent tactics,” the customers said in their complaint. “Those failing to meet daily sales quotas are approached by management, and often reprimanded and/or told to ‘do whatever it takes’ to meet their individual sales quotas.”

Wells Fargo agreed to pay $185 million in fines and penalties in a settlement this month with federal regulators. The San Francisco-based bank didn’t admit or deny wrongdoing as part of that agreement. The bank has fired 5,300 workers -- about 10 percent of whom were managers -- and said it would eliminate sales goals linked by regulators to its cross-selling strategy.

A group of Democratic U.S. senators, led by Elizabeth Warren of Massachusetts, asked Chairman and Chief Executive Officer John Stumpf in a letter dated Thursday whether the bank will claw back top managers’ pay following allegations involving millions of unauthorized accounts. The lawmakers called out Carrie Tolstedt, who led the unit where the alleged misconduct occurred, saying there seems to be ample justification for recouping at least some of her compensation.

‘Chief Sandbagger’
Tolstedt, 56, was head of community banking until July, when the bank announced she was retiring and would be replaced by retail brokerage head Mary Mack. She is described as the “chief sandbagger” in the Utah lawsuit, referring to what it describes as Wells Fargo’s practice of failing to open customer accounts in a timely fashion, instead stockpiling them until the next sales reporting period.

Wells Fargo could recoup about $17 million in unvested shares from Tolstedt, according to a Bloomberg analysis of figures compiled from regulatory filings. Cash and stock she already owns -- including about $51 million of shares amassed during her 27-year career and $36 million in previously vested stock options -- aren’t eligible for claw back, according to the filings.
 
Wells Fargo shares fell for the sixth straight session Friday, dropping 1.6 percent to $45.43. The stock has tumbled 16 percent this year, the worst performance in the 24-company KBW Bank index. Since the settlement with the U.S. regulators, Wells Fargo lost its ranking as the world’s most valuable bank. JPMorgan Chase & Co. and Industrial & Commercial Bank of China Ltd. have now both eclipsed it.

The plaintiffs in the Utah lawsuit seek to represent other customers in a class action and to recover at least $5 million in damages from the bank. They said the company also should have to pay punitive damages for its failure to alert customers to the abuses for more than a year after it was sued by the Los Angeles city attorney.

‘Plausible Deniability’
Bank executives were aware employees were gaming the system but failed to intervene, according to the lawsuit. Instead, executives including Tolstedt were rewarded and promoted for bolstering the bank’s numbers, the plaintiffs allege. Firing more than 5,000 employees after the scandal became public was merely “cosmetic” and intended to provide “plausible deniability," they said.
Mary Eshet, a Wells Fargo spokeswoman, declined to comment on the lawsuit.
Stephen Christiansen, a lawyer for the plaintiffs, said he believes his case is the first class-action against Wells Fargo since the U.S. Justice Department investigation began. He said Tolstedt and other employees may be added as defendants.
In their suit, the plaintiffs seek to force Wells Fargo to claw back compensation from “those who profited personally from the illegal behavior.”
 
Privacy Invaded
The plaintiffs, who contend the group might cover 1 million customers, said the bank invaded customers’ privacy and "failed to protect and safeguard" their confidential information. "The highest-ranking executive members of Wells Fargo, which may have included Carrie Tolstedt," knew about that failure, they said.
Some customers learned of the unauthorized actions only by, for example, receiving welcome e-mails from Wells Fargo congratulating them on opening new accounts, according to the complaint. Others got calls from collection agencies warning them they were overdrawn on accounts they didn’t recognize.
The bank is also accused in the suit of misleading customers to force them to open new accounts, sometimes falsely stating that they would face penalties without additional products.
The case is Mitchell v. Wells Fargo Bank, National Association, 16,-cv-00966, U.S. District Court, District of Utah.

Your Money Or Your Life: What's Behind The Latest Government Scam To Rob You Blind?
 
ZeroHedge.com      Sep 13, 2016 10:10 PM
Submitted by John Whitehead vis The Rutherford Institute,
“The fact is that the government, like a highwayman, says to a man: Your money, or your life. And many, if not most, taxes are paid under the compulsion of that threat.”--Lysander Spooner, American abolitionist and legal theorist

It used to be that the Constitution served as a bulwark against government abuses, excesses and wrongdoing.

That is no longer the case.
Having been reduced to little more than a historic document, the Constitution now provides scant protection against government abuses, misconduct and corruption.
Not only are “we the people” painfully vulnerable to the whims of any militarized cop on the beat, but we are also sitting targets for every government huckster out to fleece the taxpayer of their hard-earned dollars.

We get taxed on how much we earn, taxed on what we eat, taxed on what we buy, taxed on where we go, taxed on what we drive, and taxed on how much is left of our assets when we die.
Because the government’s voracious appetite for money, power and control has grown out of control, its agents have devised other means of funding its excesses and adding to its largesse through taxes disguised as fines, taxes disguised as fees, and taxes disguised as tolls, tickets and penalties.

The government’s schemes to swindle, cheat, scam, and generally defraud Americans have run the gamut from wasteful pork barrel legislation, cronyism and graft to asset forfeiture schemes, the modern-day equivalent of highway robbery, astronomical health care “reform,” and costly stimulus packages.

Now the government and its corporate partners in crime have come up with a new scheme to not only scam taxpayers out of what’s left of their paychecks but also make us foot the bill, and it’s coming at us in the form of a war on cash.

What is this war on cash?
It’s a concerted campaign to do away with large bills such as $20s, $50s, $100s and shift consumers towards a digital mode of commerce that can easily be monitored, tracked, tabulated, mined for data, hacked, hijacked and confiscated when convenient.
Much like the war on drugs and the war on terror, this so-called “war on cash” is being sold to the public as a means of fighting terrorists, drug dealers and tax evaders. Just the mere possession of cash is enough to implicate you in suspicious activity and have you investigated. In other words, cash has become another way for the government to profile Americans and render them criminals.

The rationale is that cash is the currency for illegal transactions given that it’s harder to track, can be used to pay illegal immigrants, and denies the government its share of the “take,” so doing away with paper money will help law enforcement fight crime and help the government realize more revenue.

Despite what we know about the government and its history of corruption, bumbling, fumbling and data breaches, not to mention how easily technology can be used against us, the campaign to do away with cash is really not a hard sell.

It’s not a hard sell, that is, if you know the right buttons to push, and the government has become a grand master in the art of getting the citizenry to do exactly what it wants. And if you belong to the growing class of Americans--46% of consumers, approximately 114 million adults and rising—who use your cell phone to pay bills, purchase goods, and transfer funds, then the government is just preaching to the choir when it comes to persuading you of the convenience of digital cash.
In much the same way that Americans have opted into government surveillance through the convenience of GPS devices and cell phones, digital cash—the means of paying with one’s debit card, credit card or cell phone—is becoming the de facto commerce of the American police state.
It’s not just cash that is going digital, either.

A growing number of states—including Delaware and California—are looking to adopt digital driver’s licenses that would reside on your mobile phone. These licenses would include all of the information contained on your printed license, along with a few “extras” such as real-time data downloaded directly from your state's Department of Motor Vehicles.
Of course, reading between the lines, having a digital driver’s license will open you up to much the same jeopardy as digital cash: it will make it possible for the government to better track your movements, monitor your activities and communications and ultimately shut you down.

So what’s the deal here?

First, it’s hard to imagine how a cashless world navigated by way of a digital wallet doesn’t signal the beginning of the end for what little privacy we have left and leave us vulnerable to the likes of government thieves and data hackers.

Second, digital wallets will make it that much easier for government agents to take advantage of civil asset forfeiture schemes. ERAD (Electronic Recovery and Access to Data) devices supplied by the Department of Homeland Security allow police to not only determine the balance of any magnetic-stripe card (i.e., debit, credit and gift cards) but also freeze and seize any funds on pre-paid money cards. 

Third, the war on cash is about giving the government the ultimate control of the economy and complete access to the citizenry’s pocketbook.

Fourth, every technological convenience that has made our lives easier has also become our Achilles’ heel, opening us up to greater vulnerabilities from hackers and government agents alike. Digital cash will be no different. In recent years, the U.S. government and a host of financial institutions, retailers and entertainment giants have been repeatedly hacked. And these are the people in charge of protecting our sensitive information?
 
Fifth, if there’s one entity that will not stop using cash for its own nefarious purposes, it’s the U.S. government. Who could forget the $12 billion in shrink-wrapped $100 bills that the U.S. flew to Iraq only to claim it had no record of what happened to the money.

Sixth, this drive to do away with cash is part of a larger global trend driven by international financial institutions and the United Nations that is transforming nations of all sizes, from the smallest nation to the biggest, most advanced economies.

Finally, short of returning to a pre-technological, Luddite age, there’s really no way to pull this horse back now that it’s left the gate.

To our detriment, we really have little control over who accesses our private information, how it is stored, or how it is used. Whether we ever had much control remains up for debate. However, in terms of our bargaining power over digital privacy rights, we have been reduced to a pitiful, unenviable position in which we can only hope and trust that those in power will treat our information with respect.

America’s founders, however, did not believe in trusting government officials or giving them too much power. In fact, they believed those entrusted with power will eventually pervert it into tyranny. As Thomas Jefferson observed, “Let no more be heard of confidence in man, but bind him down from mischief by the chains of the Constitution.”

Unfortunately, that Constitution has since been shredded.

Our republic has been transformed into an oligarchy.

We have come full circle, back to a pre-revolutionary era of taxation without any real representation.

We the people, once free citizens of a free nation, are now at the mercy of cutthroats and villains masquerading as government agents and elected officials. We continue to be robbed at gunpoint, treated like cattle, tracked incessantly and forced to serve and obey. We continue to be branded rebels and traitors and enemy combatants, shot without hesitation for daring to resist an official order or challenge injustice, and duped into believing all this was done for our “good.”
In the end, as I make clear in my book Battlefield America: The War on the American People, we are no better than when we first started out more than 200 years ago as indentured slaves to a government elite intent on using us for their own profit and gain.

Sorry, You Can't Have Your Gold

ZeroHedge.com     Sep 12, 2016 7:30 PM

Submitted by Jeff Thomas via InternationalMan.com,

We warn regularly of the risk involved in storing wealth in banks. They’ve made the removal of your deposits increasingly difficult in addition to colluding with governments to allow them to legally freeze or confiscate your money. To add insult to injury, they’re creating reporting requirements with regard to the contents of  safe deposit boxes and restricting what can be stored in them – again, at risk of confiscation.

More and more, banks are becoming one of the more risky places to store wealth in any form. Not surprising, then, that many people are returning to those facilities that treat wealth storage the way the first banks did millennia ago – vault facilities that store your wealth for a fee but engage in no other banking activities. But, in suggesting to our readers that such facilities are a better bet, I’ve also repeatedly warned readers that many such facilities don’t store actual, physical gold. They instead provide a contract to you that states that they will deliver an agreed-upon amount of gold upon demand. The trouble with this idea is that it becomes tempting for such facilities to sign such a contract with you and collect the purchase price but never actually purchase and store any gold. It’s been estimated that the total worldwide value of such contracts equals 150 times the amount of gold in existence in the world.

Uh-oh.

This is why it’s imperative that you purchase only physical, allocated gold.
And another caution: I’ve repeatedly stated that, although many of the most secure facilities in the world are located in North America and Europe, these jurisdictions are on the cusp of economic crisis, a fact that suggests that, if and when the crisis arrives, the rule book will be thrown out the window. Governments and facilities alike may prove untrustworthy and, at some point, you may drop by the facility to withdraw your gold and be told, “Sorry, we’re unable to provide delivery.” There could be a multitude of reasons given, hoops to jump through, and endless red tape to deal with. And still, in the end, you may never be able to take delivery.

It’s for these reasons that we advise that, although nothing in life is guaranteed, you should always protect your wealth by choosing the least risky option.

This means that you should follow two simple rules – Rule #1: Select the jurisdiction with the best laws and reputation. Rule #2: Make sure there’s a reputable storage facility in that jurisdiction that has a Class III vault and a contract that meets your needs. But am I being overly cautious when I so frequently offer this advice? Unfortunately, no. I’ve predicted that, in the future, as we get closer to a monetary crisis, banks and storage facilities that are located in countries that are likely to be heavily affected will work ever harder to avoid releasing either money on deposit (in the case of banks) and precious metals (in the case of storage facilities).

Recently, the reports that I’ve been receiving from wealth storage facilities in advantageous jurisdictions are indicating that that prediction is beginning to come to fruition. In case after case, clients are having a harder time getting their money and their metals out. In most cases, those institutions that don’t wish to deliver are creating red tape, stalling techniques (which are costly in both time and money), and, in some cases, outright refusals to deliver.

Let’s look at two actual examples – one of a bank, one of a wealth-storage facility.
USA: A client asks his bank to wire transfer US$178,000 in funds to an overseas facility to purchase precious metals for storage. The bank then created a series of roadblocks:

• Required a written request with an original, signed copy to be hand-delivered.
• Once that was done, a voice authorization of the letter by phone was required.
• Once that was done, it required the client to receive a PIN number, which would take several days to create and would need to be sent by courier.
• After the client jumped through all those hoops, the bank changed its requirements completely, requiring that a cashier’s cheque be sent instead, which required ten days clearance.
  

Lost time – four weeks from date of first request.
 
Austria: A client tries to transfer his allocated 138 gold Philharmonics from his bank to a facility in another jurisdiction. The bank repeatedly produced roadblocks, as follows:

• Refused to ship the products themselves and refused to arrange shipment.
• Refused to release the goods to FedEx when they arrived, even though proof of insurance was provided. The bank then insisted on the hiring of a Brinks truck.
• They then refused to release the coins at all, except to another bank.
• They then claimed that they were “not ready” to release the coins. The client was invited to “try again” if he wished. (Eight attempts were required.)
• Finally, they agreed to release the coins, but only if a 1% withdrawal fee were applied (not part of the original agreement – essentially a ransom).
  

There are many, many more examples already, but these should suffice to illustrate the growing trend: If you wish to get your money or metals out of an endangered jurisdiction, such as an EU country or North America, the window of opportunity is closing. Expect them to make it difficult, costly, and even impossible for you to get out.

But why should this be? What are these institutions up to? Don’t they realise that they’re sending a message to clients that they’re not helpful partners?

Well, yes they do, but they’re also aware of another factor that’s more important to them. As the economic crisis gets ever closer, they understand that the day will soon come when a banking emergency is declared and the banks will shut their doors for an as-yet-unknown period of time (presumably until a solution is found). What will the new rules be? No one knows. Will the banks and storage facilities be obligated to deliver in full if the doors open once again? No one knows.
Therefore, in the final stretch of this race to the bottom, they want to be holding as much of your money and metals as they can.

The above examples are just the thin end of the wedge and we can expect the future to reveal greater restrictions. Whilst, in an economic crisis, there are no guarantees, what we can do is opt for the situation that’s least likely to cost us our wealth. Again, Choose a jurisdiction that has the best track record – a long history of a low-tax, or no-tax, regime; a stable government and legislation that protects rather than victimizes the foreign investor.
Choose the jurisdiction that’s easiest for you to access – In Europe, this might be Switzerland or Austria. In Asia, this might be Singapore or Hong Kong. In the Western Hemisphere, this might be the Cayman Islands.
Choose the best facility within that jurisdiction – the one that has the best reputation and offers the best contract (competitive rates, Class III vault facility, 24-hour viewing access, etc.).
At this juncture, we can’t say how long the need to safeguard wealth will be as essential as it will be in the near future. It may be brief (a few years), or it may be many years before the dust has settled. Whatever the outcome of the coming economic crisis, those who have chosen the safest havens for their wealth will be those who will fare best.