CNN Data Doctor: When Criminals Take Over Your Web Mail Account
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Wachovia To Pay Huge Fine For Conspiring With Fraudulent Telemarketers

President George W. Bush on board the aircraft carrier USS Abraham Lincoln on May 1, 2003 [Editor's Note: today is the anniversary of an important event in U.S. history. May 1, 2008 is the fifth anniversary of "Mission Accomplished" - the day George W. Bush stood proudly on the aircraft carrier USS Abraham Lincoln and declared major combat operations over in Iraq. 140 U.S. military personnel died before May 1, 2003. During March 2008, the number of U.S. military deaths passed 4,000. Today, Osama Bin Laden has not been brought to justice and still remains at large. I think that it is important to judge a President, his administration, and his policies by the results achieved, and not on good intentions. Now, on to today's post.]

You could have labeled today's post, "When A Bank Goes Bad." The New York Times reported on April 26:

"The Wachovia Corporation agreed on Friday to pay as much as $144 million to end an investigation that accuses the bank of allowing telemarketers to use its accounts to steal millions of dollars. The settlement, one of the largest penalties ever demanded by the federal Office of the Comptroller of the Currency, concludes an 18-month inquiry into Wachovia’s relationships with schemes that investigators say stole from thousands of victims, many of them elderly."

The New York Times also reported:

"Though Wachovia did not admit or deny wrongdoing, the investigation found that Wachovia, one of the country’s largest banks, engaged in unsafe practices — failing to conduct suitable due diligence, failing to monitor accounts used by telemarketers and failing to follow normal procedures that would probably have uncovered the thefts. The bank’s actions were “part of a pattern of misconduct” that resulted in Wachovia’s collecting millions of dollars in fees, regulators wrote. Wachovia has agreed to pay a $10 million fine, contribute $8.9 million to consumer education programs and make restitution to victims that could top $125 million."

For consumers, it's tough enough to protect yourself against identity theft and identity fraud. Your bank should not facilitate identity fraud. For background, also read this February 2008 post about Wachovia. The huge fine is great, but jail time should also apply:

"Internal Wachovia e-mail messages and documents collected as part of that lawsuit showed that high-ranking employees long knew about accusations of fraud, but that some bank workers continued to solicit business from the telemarketing companies accused of crimes. “YIKES!!!!” wrote one Wachovia executive in 2005, warning colleagues that an account used by telemarketers had drawn 4,500 complaints. “DOUBLE YIKES!!!!” But Wachovia continued processing fraudulent transactions for that account and others."

That's 4,500 complaints! Not 45, but 4,500! For perspective, the Hannaford data breach included 1,800 cases of fraud. Thankfully:

"The settlement also does not preclude the United States attorney in Philadelphia, Patrick L. Meehan, from prosecuting Wachovia or bank employees. Mr. Meehan’s office is considering a criminal investigation, according to two people close to the matter who spoke on the condition of anonymity because they are not authorized to speak to the media."

Go Meehan! This type of crap will stop when senior executives serve significant jail time. Otherwise, banks will pass along the cost of the fine to consumers and account-holders through more and higher fees or other mechanisms.


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mac insleads

I hope they get taken to the cleaners for what they have done.

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