Class action lawsuit says Wells Fargo customers lost over $160 Million

CALIFORNIA – Plaintiffs, in a case against Wells Fargo alleging that the bank knowingly took part in a marketing scam, asked the court, July 8, not to grant a motion for summary judgment.

Court documents say customers lost over $160 million.

The class action lawsuit – McNamara v. Wells Fargo & Co., was filed initially in 2021 in California federal court. It alleged Wells Fargo engaged in a marketing scam.

Triangle Media Corporation offered free product trials that turned into subscriptions that were difficult to cancel. The lawsuit says Wells Fargo knew of the fraudulent activities but maintained the company’s depository accounts.

The motion for summary judgment is a legal request asking the court to decide the case or a specific part of the case in Wells Fargo’s favor without a full trial.

Triangle Media multi-level scheme

In 2018, the Federal Trade Commission (FTC) brought an enforcement action against Triangle Media Corporation owners Brian Phillips and Devin Keer.

The FTC alleged that Triangle Media engaged in a multi-level scheme to sell trial offers of discounted skincare products, electronic cigarettes, and dietary supplements online in order to obtain consumers’ credit and debit card information.

Court documents say Triangle Media enrolled them in a continuity program, charging them a recurring subscription fee on a monthly basis without their consent.

The Wells Fargo class action lawsuit says the bank maintained depository accounts used to perpetrate the free trial scam.

Chargebacks are a sign of fraud

Plaintiffs in the case opposed Wells Fargo’s recent motion for summary judgment. They argued an increase in chargebacks shows the bank knew about the alleged fraud.

“Merchant processors see rising chargebacks as a strong sign of fraud and will terminate a retailer’s account if its chargeback rate exceeds the 1% industry standard,” said the plaintiffs. “For this and other fraud-related reasons, processors regularly terminated the enterprises’ accounts.”

A chargeback is when a cardholder’s bank initiates a credit card transaction reversal due to fraudulent or disputed charges.

Court documents say that Triangle Media required new depository accounts and allegedly established shell accounts at Wells Fargo. The plaintiffs allege the bank deliberately disregarded obvious signs of fraud to maintain its relationships with the scam perpetrators.

The plaintiffs are represented by Jonathan M. Rotter, Melissa C. Wright, Garth A. Spencer and Gregory B. Linkh of Glancy Prongay & Murray LLP and Logan Smith of McNamara Smith LLP.