Consumers to get $150 million in Wachovia settlement
By Matt Schulz
More than 700,000 Americans' holidays are about to get a little brighter -- an average of $203 brighter -- as the result of a settlement between Wachovia Bank and the federal government.
On Thursday, Wachovia began to mail out checks totaling more than $150 million to some 740,000 consumers. That averages out to $203 per payment. The payout stems from two class action lawsuits regarding allegedly inappropriate acts committed by payment processors that had relationships with Wachovia. The settlement was agreed to by the bank and the Office of the Comptroller of the Currency.
The case involved "remotely created checks," which -- as the name suggests -- aren't created by the account holder and are not signed by the account holder. In place of the signature, the checks would bear text such as "Authorized by your depositor, no signature required."According to the OCC release, "The telemarketers obtained bank account information over the phone by offering consumers a range of questionable products and services. With the account information obtained during the call, the telemarketer would direct the payment processor to create a remotely created check. The payment processor would then deposit the remotely created check into the processor's account at Wachovia, and funds were then withdrawn from consumers' accounts to make payment on the check and deposited into the processor's account."
The companies involved were Payment Processing Center LLC, FTN Promotions Inc., Suntasia Inc., Netchex Corp., and Your Money Access LLC, and related companies.
Many Wachovia account holders reported the unusual activity in their accounts as it was happening and have already been reimbursed. However, Wachovia said in a release that this settlement will ensure that all affected parties will be reimbursed in full for any amount that had been removed from their accounts.
Wachovia, which agreed in October to be purchased by Wells Fargo for $15.1 billion in stock, added that any consumers who incurred fees caused by the telemarketing transactions may have those fees refunded in full by filing a claim with Rust Consulting Inc.
For more information, call (866) 680-6659 or visit RestitutionPayment.com.
+Matt Schulz is Managing Editor at CreditCards.com.
Published: December 11, 2008
- Why your credit card issuer really wants to text you – MasterCard and Visa will require that all card issuers provide opt-in alert programs for potentially fraudulent transactions ...
- Maximum fee rises to $38 for repeat late fees – The Consumer Financial Protection bureau raised the maximum late fee that credit cards can charge for repeat late fees by $1 ...
- Fed dials back rate-hike expectations – In a reprieve for credit card borrowers, the Federal Reserve decided against a rate increase for the fourth time this year and signaled a slower pace of increases ...