Wells Fargo’s $480 Million Settlement Draws Attention to Potential 401(k) Consumer Fraud
The bank chain Wells Fargo is once again in hot water over its fake customer/consumer fraud account scam. In May, the banking company agreed to pay $480 million to put to rest claims that it misled shareholders about these sales practices and its fake-accounts scandal.
Federal law requires that companies like Wells Fargo warn shareholders about legal matters such as these. However, in this case, Wells Fargo stayed silent for at least six months; not only with consumers, but with shareholders. Meanwhile, six months prior to the announcement, Wells Fargo was already in talks with the Consumer Financial Protection Bureau.
In the meantime, the bank’s tactics are still being investigated by the Justice Department, Labor Department, and Securities and Exchange Commission. The federal government has also urged the board of the bank to look into whether the bank made inappropriate recommendations to customers about their 401(k) plans.
401(k) Plan Fees
When it comes to these retirement plans, one potential consumer fraud issue involves fees on the plans. Most people with a 401(k) retirement plan do not think that they are paying fees. However, they often are, whether they are administrative fees, fees for bonds, funds, stocks, and other investments, service charge fees, and more.
Annual Disclosure Requirements
It is important to know that federal law mandates that everyone with a 401(k) receive an annual disclosure notice about fees, where you can see how the fees and expenses were used, and how the investment funds have performed over time. This gives you an opportunity to consult with your employer to find more cost-effective investment options or plan services if you find that the fees are too high.
401(k) plans are the most common retirement plans offered by employers in America. However, they can still be mismanaged and the subject of consumer fraud. Employees can also file claims against their employer for mismanaging funds and/or violating the Employee Retirement Income Security Act of 1974 by offering products with high fees, poor investment options, and other activities.
Florida Consumer Protection Attorneys
Keep in mind that you could be an investor in Wells Fargo stock through your 401(k) or other investments, which means that you could be impacted by these recent consumer fraud issues. Many Floridians are also the victims of consumer fraud each year when expensive life insurance policies are advertised instead as retirement plans.
Our commercial litigation attorneys have a long history of protecting Florida consumers who have been victimized by consumer fraud practices. It is important for you to know that you have rights, and working with an experienced attorney can help you exercise those rights. Contact our consumer protection attorneys at Lavalle, Brown & Ronan today to find out more.