Wells Fargo Could Impact Prudential Financial in Fraudulent Insurance Sales

Wells Fargo Could Impact Prudential Financial in Fraudulent Insurance Sales

Prudential Financial Incorporated could be the next in line to suffer after Wells Fargo sales scandal came up. Prudential Financial faces lawsuit in New Jersey state court. Wells Fargo suffered massive blow to its reputation and market valuation after the sales scandal emerged.

The matter is regarding many clients enrolled in life insurance policies without their knowledge. Initial reports suggest a ‘large number of similarities’ between the way Wells Fargo accounts were created and the policies at Prudential Financial.

In October, Wells Fargo CEO John Stumpf stepped down from his post. He faced inquiries and faced criticism from billionaire investor Warren Buffett. Prudential has been blamed of covering-up the issue regarding fake accounts.

In the lawsuit, three employees of Prudential Insurance Co. of America’s corporate investigations division have blamed company executives for ignoring their reports regarding fake accounts issue. They have alleged in the lawsuit that they were put on administrative leave after they reported the issue. They also faced threat of imminent termination hanging over their heads, the employees claimed.

Scot Hoffman, a spokesman for Prudential Financial said, “These former employees were terminated for appropriate and legitimate reasons that were entirely unrelated to Prudential’s business with Wells Fargo and Prudential’s decision to examine sales of the MyTerm product. Beyond that, Prudential does not comment on employment matters.”

Nearly 70 percent of Prudential Financial policies issued in year 2014 lapsed. The complaint further informed that the number of new policies spiked around the end of each quarter, possibly to inflate numbers.

Most of the questionable policies were sold to Hispanic customers in Southern California, South Florida and southern regions of Texas and Arizona, as per the lawsuit.

"As we have consistently reinforced, if we identify any instances where a customer received a product they didn't ask for, we will make it right," Mary Eshet, a spokeswoman for the bank said in a statement.

Hoffman added, “We are confident that the court will agree once the true facts are revealed during the litigation.”

According to a wrongful termination suit filed in New Jersey state court this week by three former managers in Prudential's corporate investigation division, Wells Fargo employees appear to have signed up bank customers for the Prudential policies without the customers' knowledge or permission.

When investigators reviewed tapes of calls to Prudential’s customer service line, they found complaints from Wells Fargo customers about policies they did not remember buying, The New York Times report informed.


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