Prudential Now Looks To Be Complicit In Wells Fargo's Massive Fraud

Wells Fargo fraud scandal now includes life insurance policies offered through Prudential and sold by Wells Fargo bankers. Apparently, Wells Fargo coordinated with Prudential to offer the Prudential MyTerm life insurance to Wells Fargo customers. The MyTerm policies were easy to sign up for as they required no medical exam, just a few questions that could be answered online. Bankers are not usually licensed to also sell life insurance so the Wells employees would steer customers to either a website or a kiosk inside the bank where the insurance could be purchased. The employees would then get some credit toward their sales goals, the same high pressure sales goals that led to the opening of thousands of fraudulent accounts without customer authorization. In the same way, Wells bankers also began purchasing these MyTerm life insurance policies for their customers without authorization for more than a decade. And the attempts were brazen. Some bankers would sign up their friends and relatives and even pay the first month’s premium in order to get credit toward their sales goals before cancelling the insurance. Others were apparently less concerned with anomalies in their bogus applications such as have cell phone numbers as email addresses, the email address clearly not matching the name of the insured, sometimes even using a bogus Wells Fargo email address. The bulk of these sham policies were apparently sold to Hispanics is Southern California, Arizona, Texas, and South Florida.

It also is beginning to look like Prudential was at least complicit in this fraud as well. Over 70% of the MyTerm policies that Wells Fargo sold in the first year of this collaboration lapsed within the year, some without any premiums being collected at all. In addition, some “buyers” purchased and then cancelled the insurance multiple times. There is no doubt that someone somewhere at Prudential had to see these metrics as they are an enormous red flag. But Prudential took no action. It was not until the other Wells Fargo account fraud came to light that Prudential began an internal investigation. That investigation revealed exactly what had been going on. But the three investigators working on the issue were summarily fired just before Thanksgiving for apparently texting each other a year earlier and complaining about other members of their group. That certainly sounds like a pretty thin reason for firing someone, especially in the financial industry. The three investigators have now filed a wrongful termination suit against Prudential claiming that they were actually fired for pressing for a more thorough investigation as well as reporting their findings to the regulators. Their belief is that Prudential is attempting to “sweep this under the rug”. It is only through this wrongful termination suit that we even know about these fraudulent insurance companies. And this suit also shows that Wells Fargo has once again been less than forthcoming about the extent of the fraud it has perpetuated.

I continue to rant and rave about the consistent pattern of illegal activity in the financial industry. It is long past time for prosecutors, rather than regulators, to take some action against these serial offenders. With Trump’s cabinet chock full of Goldman Sachs alumni, it is hard to see the already pathetic regulators doing anything substantial. It is time for state Attorneys General to step up to the plate and right now there are only two who look like they can take on these financial behemoths – Eric Schneiderman in New York and the newly appointed Xavier Becerra in California. These two will probably be battling with the Trump administration in a number of areas, especially the presence of unauthorized immigrants. Let’s hope they don’t lose sight of the largely poorer and unsuspecting citizens that these financial giants continually rip off.