Prudential snared in Wells Fargo scandal
When it was reported that Wells Fargo had created untold numbers of fake bank and credit accounts in order to meet quotas, the public was furious. Thousands of employees, including some management, were fired … but it gets worse. Now, according to CNN, it may not have just been bank accounts.
Reports are coming out that Prudential insurance products were sold to Wells Fargo customers without their consent or even knowledge of the transactions. The allegations came to light after a trio of former Prudential employees sued the company about the fake sales.
And, apparently, the insurance products didn’t even try to hide how fake they were. The lawsuit includes information that the policies had ridiculously fake-sounding contacts on the applications, with addresses such as “Wells Fargo Drive” or faux email addresses such as “email@example.com.”
The absolute brazen falseness of these accounts might have been bad enough, but the question begged by the whole mess is this—where did they get the funds to open the accounts? Turns out, CNN reports, it could have been from “dormant” Wells Fargo accounts.
If true, the Prudential employees who opened the false accounts could be in at least as much trouble as the Wells Fargo employees who did something similar, maybe more. The employees who filed the suit did so under the Dodd-Frank whistleblower act, which is intended to rein in fraudulent behavior in the securities industry.
The three whistleblowers, whose job it was to review Prudential’s working relationship with Wells Fargo, turned up a series of red flags, including high percentages of lapses in certain term life policies, especially after the policies became available through Wells Fargo. In addition, reviewers found unusual spikes in sales toward the end of each quarter, likely to meet expected quotas.
According to the plaintiff’s attorney, the three whistleblowers first tried to bring the fraudulent activity to the attention of their superiors. According to their version of events, their supervisors attempted to coerce them into a cover up, but they refused. Subsequently, all three were placed on unpaid administrative leave. While they have not yet formally been fired, they assume their employment has been terminated.
The initial question from a PR perspective is, “who will customers believe?” These were people tasked with doing a specific job. When they did their job, they were let go, and the company tried to cover up what they found. That’s their version. Prudential has yet to fire back, but once they do, the public will have to decide which narrative sounds the most plausible.