Wachovia accused of aiding telemarketing fraud

(Reuters) - Wachovia Corp (WB.N: Quote, Profile, Research), the fourth-largest U.S. bank, is fighting a lawsuit accusing it of letting fraudulent telemarketers use its accounts to bilk millions of dollars from consumers, court papers show.

Documents filed last month in the U.S. District Court in Philadelphia, also reported in the February 6 edition of The New York Times, detail accusations the bank and its lawyers knew about the fraud allegations for years.

The plaintiffs accused Wachovia of allowing some "payment processors" to create authorized, unsigned checks on behalf of telemarketers to withdraw funds from customer accounts between 2003 and 2006, court papers show.

They also accused Wachovia of trying to win or retain business from companies that it knew were accused of telemarketing fraud, despite being alerted by other banks about the deceptive activity, the papers show.

The original complaint was filed last April. Plaintiffs are seeking class-action status on behalf of at least 346,000 victims they say lost millions of dollars, the documents show.

Wachovia has sought to dismiss the complaint.

 

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