Wachovia to Pay $125 Million in Phone Fraud Case
The Office of the Comptroller of the Currency has reached a settlement with Wachovia Bank, N.A. directing the bank to pay about $125 million in restitution to consumers harmed by its relationships with several telemarketers and third-party payment processors.
In addition, the bank will contribute approximately $8.9 million to consumer education programs directed at the elderly and to pay a $10 million fine to the U.S. Treasury.
Many victims have already received reimbursement from the payment processors and telemarketers. The settlement is intended to cover those who have not already received restitution, according to the OCC.
The payment processors and telemarketers involved were: Payment Processing Center LLC; FTN Promotions Inc. doing business as Suntasia Inc.; Netchex Corp. and Your Money Access LLC and related companies, according to the OCC.
In reaching the settlement, after an 18-month investigation, the OCC concluded that the bank engaged in unsafe or unsound practices during the course of its relationships with the payment processors and telemarketers and unfair practices as defined by the Federal Trade Commission Act.
According to the OCC, thousands of consumers, many of whom were elderly, were harmed, and that the bank profited in the form of fees collected from and balances maintained at the bank by the payment processors and telemarketers.
Under the agreement, the bank will forfeit an amount equal to the fees it earned and donate the funds, plus an additional $5 million, to consumer education programs directed at the elderly, according to the OCC..
The practices cited in the settlement involved the use of remotely created checks, or RCCs, by telemarketers and payment processors that maintained account relationships with the bank. An RCC is a check that is not created by the account holder and does not bear the person
