The ongoing Wells Fargo scandal is now reaching out into another large industry—insurance. Prudential Financial Inc. is being accused of covering up their own set of fraudulent life insurance policy sales using … Wells Fargo. The fraud surrounds Prudential’s “MyTerm” policies which were aimed at people who couldn’t “otherwise obtain life insurance,” and could only be purchased via kiosks inside of Wells Fargos or online using Wells Fargo accounts.
Many of the customers, who often had Hispanic last names, didn’t know what they had purchased and there were “a large number of similarities” between the way Wells Fargo employees opened bogus bank accounts without customers’ knowledge and the way Prudential’s “MyTerm” policies were sold by the bank, three of the insurer’s former employees said in a lawsuit filed in New Jersey state court.
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The three employees of Prudential Insurance Co. of America’s corporate investigations division said executives ignored their reports of the abuses for fear of alienating Wells Fargo as a business partner. They said they were placed on administrative leave and escorted from the building in a “perp walk” and now have a “threat of imminent termination hanging over their heads,” according to a copy of the complaint in New Jersey state court that was confirmed by a lawyer for the plaintiffs. The lawsuit, reported late Friday by the New York Times, couldn’t be confirmed immediately in court records.
What’s the evidence besides a bunch of angry employees?
A review found that 70 percent of the policies sold in 2014, the year the program started, lapsed, and that sales of the policies spiked near the end of each quarter, according to the complaint. The policies were sold predominantly to people with Hispanic names in Southern California, South Florida and southern regions of Texas and Arizona, according to the plaintiffs.
With Trump’s election, the level of pressure that will continue to be employed on companies like Wells Fargo and Prudential is anybody’s guess. The initial fines and punishments against Wells Fargo were relatively meek in the first place. But public pressure continues to build and exposing these criminal and predatory practices won’t end in the new year.