12
Sept. 15, 2016
Global Business
Business & Finance www.jcunews.com
Wells Fargo charged for illegal tactics Amanda Horner The Carroll News
AP
Jacqueline Witwicki
Business & Finance Editor
Last chance tourism affects local economies and environments As world heritage sites and natural formations begin to experience the effects of climate change, a mad dash of tourism has begun as people embark on mass exodus to view these historic and natural sights before they die out. Among the endangered sites are The Rio Platano Biosphere Reserve in Honduras, The Everglades National Park in the United States, The Galapagos Islands, the Great Barrier Reef, Machu Picchu and many others, USA Today reports. These locations now have noticeable signs of climate change from large coral die outs and bleachings in The Great Barrier Reef to excessive hunting and poaching leading to species wide die outs in the Rio Platano Biosphere Reserve. As these sites begin to deteriorate, tourism has spiked thanks to last chance tourists who hope to experience these natural wonders before they are gone. Vice reports that more than four million people travel to the Great Barrier Reef each year, however this year alone domestic visitors have jumped by 33.5 percent since March. Revenue from these tourism spikes has contributed to hundreds of local economies globally. Parks have taken advantage of this influx of revenue and interest, instituting new programs and encouraging education in the subject of global warming. However, there have been downsides to this market boom. As tourists flock to these sites they inadvertently add to the problem of global warming, contributing to greenhouse gas emissions with their travel. There have also been several instances of tourists outright harming these sites, whether intentionally or accidentally. The most recent example of this occurred on Sept. 6 when several of these visitors destroyed an 18 million year old rock formation at Oregon National State Park. These visitors hopped over a fence and disregarded clear warning and keep out signs before intentionally destroying the beloved formation, NBC reports. It remains to be seen whether the phenomenon of last chance tourism will provide the funds and visibility necessary to aid these world heritage sites or if careless tourists will lead to their ultimate disappearance all together.
Contact Jacqueline Witwicki at jwitwicki19@jcu.edu
The Carroll News
On Sept. 8th, Wells Fargo was caught commiting illegal sales tactics against their customers. Wells Fargo & Co. was hit with a $185 million fine after being charged with employing a series of widespread, illegal sales tactics against their customers on Sept. 8. Wells Fargo finally reached a settlement after being charged with a lawsuit last year by LA City Attorney, Mike Feuer. The bank did not admit to foul play in
its sales practices but subsequently settled and paid out $100 million to the CFPB, $50 million to the city and county of Los Angeles and $35 million to the OCC, according to The New York Times. In addition, the bank will also pay refunds to customers who were charged fees on the dishonest accounts they never wanted. According to the investigations, The LA Times states that “employees illegally transferred funds from genuine accounts into unauthorized ones, created PINs for unwanted debit cards and made up bogus email addresses to secretly sign customers up for online banking.” This extensive violation was the result of a new incentive structure that urged employees to push the “cross-selling” of varied products and services because banks have been under pressure to retain profitability at a time when the economy is slow-moving and interest rates are incredibly low. Wells Fargo claims to have solved this issue, saying that workers who participate in fraudulent or illegal sales tactics are always disciplined or fired. Also, since 2011, the bank has terminated
roughly 5,300 employees for engaging in this type of practice, thoroughly avoiding any culpability in their upper-level management for what some call “aggressive” and “unrealistic” quotas, reported NBC News. Wells Fargo & Co. has since put out notices to customers asking them to speak with someone at their local branches if they see any unwanted accounts or if they received a product/service that they did not request. According to The L.A. Times, bank spokeswoman Mary Eshet has already said that they have “lowered sales goals, worked to structure employee incentives around customer satisfaction and hired more workers to monitor its sales staff.” However Wells Fargo tries to bounce back from this incident, their illegal practices highlight the fact that it is becoming increasingly harder to protect one’s private information as a modern consumer, and that while customers should be able to trust their banks, everything is not always what it seems. Editor’s Note: Information from NBC News, The New York Times and LA Times was used in this report.
Volkswagen scandals continue in U.S. Michele Whiteleather The Carroll News The ongoing U.S. investigations of German car manufacturer Volkswagen lead to one of their engineers being convicted earlier this week. James Liang’s charges include conspiring to defraud the U.S., conspiring to commit wire fraud and conspiring to violate the Clean Air Act. The conspiracy began in November 2006, and the cheating was revealed in September of last year. West Virginia University researchers began questioning the inconsistency between road emission and test emission of certain VW models in 2014. The engineer plead guilty in Detroit federal court to helping Volkswagen cheat on emissions tests by aiding in developing a device that helped recent models appear to burn cleaner emissions on tests. Liang is just one of many engineers that have been caught up in the Volkswagen emissions scandal. Liang and colleagues were working on designing a new engine in 2006 and Liang claims they “soon realized that the engine could not meet both customer expectations as well as new, stricter U.S. emissions standards,” according the Wall Street Journal. They began designing “defeat devices” to make sure the company would be allowed to continue selling cars in the United States. The software they developed recognized when the car was undergoing a test and automatically turned on the emissions controls.
Liang has been with Volkswagen since 1983 and agreed to cooperate with the rest of the investigation. He is looking at up to five years in prison and up to a $250,000 fine at his sentencing in January. He will assist the government in the investigation and the prosecution of others within the company. The engineer claims he has remorse for what took place and is trying to get his sentence lessened. He still remains an employee of Volkswagen. The New York Times reports Volkswagen also announced they will be resuming production of cars in Kenya after a four decade break. Volkswagen stopped producing cars in this region during the 1970s. The car manufacturer has decided to resume and plans to sell more of its vehicles in
the East African region of the world. Thomas Schafer, the Volkswagen South African chief executive, stated, “we believe that Kenya has got the potential to develop very big fully fledged automotive industry. The East African Community has got the potential, and today is the first step in this direction that we want to take with our passenger cars.” Volkswagen is currently the second biggest car manufacturer in sales in South Africa, behind Toyota, according to Fortune. The German car maker will begin assembling the Polo Vivo model in a plant in Thika by the end of the year after signing a deal with the Kenyan government. Editor’s Note: Information from The Wall Street Journal, The New York Times and Fortune was used in this report.
AP
Volkswagen faced criticism in Detroit for cheating emission tests, conspiring to commit wire fraud, defrauding the U.S. and violating the Clean Air Act.
MasterCard faces legal ramifications Olivia Benton Staff Reporter
Individuals in Britain who use MasterCard, an American multinational financial services corporation, could potentially benefit from a recent legal case that has been brought against the company almost two years after a European Union court ruled the processing fees that company had charged for cross-border transactions were unfair. According to court documents filed in London, 46 million people have been allegedly charged for excessive fees. This legal case is demanding $14 billion pounds, which is the equivalent of $19 billion dollars, be returned from the MasterCard company. The case further claims that the company charged unlawfully high fees to stores when shoppers swiped their debit or credit cards, which were then passed on to consumers in higher prices. MasterCard is alleged to have done this for 16 years between 1992 and 2008, in more than 600 pages of documents filed at the Competition Appeal Tribunal on Thursday, Sept. 8.
According to Reuters, any person living in Britain who used a credit card, cash or checks and was over 16 years old in the period covered by the lawsuit will automatically be part of the claim. If the 14 billion pound claim was shared equally between the numbers of eligible claimants, each person could receive more than 300 pounds. Britain’s banks have been caught in a range of mis-selling cases in the last five years. They have paid 24 billion pounds in compensation for mis-selling loan payment insurance, making it Britain’s most expensive scandal in financial services. Consumers no longer living in Britain, but who lived in the country between 1992 and 2008, can opt in to the collective claim against MasterCard. Walter Merricks, a lawyer who once led the U.K. organization that handles consumer disputes with banks, now serves as the head lawyer for this claim against MasterCard. Merricks has hired Quinn Emanuel Urquhart & Sullivan LLP to draft the lawsuit against the MasterCard company. This claim serves as the U.K.’s biggest as well as one of the first claims filed under the Consumer Rights Act 2015. Boris Bronfentrinker, lead partner at Quinn
Emanuel, said, “this is precisely the type of claim for which the new collective action regime was established. This is a landmark case where unlawful anti-competitive conduct has harmed U.K. consumers.” Merricks told the BBC, “this was almost an invisible tax. MasterCard has behaved disgracefully in this. They have not had the reasonableness to accept that what this was doing was damaging U.K. consumers.” According to Bloomberg, Merricks has announced, “my aim is to get the redress to which U.K. consumers are entitled and to ensure that MasterCard cannot hold on to the illegal profits.” The MasterCard company has fought back and denied that it violated competition law by charging buyers excessive processing fees. MasterCard has also argued that stores cannot claim damages since they passed losses on to customers. Due to this continuing feud, suits are ongoing. Any hearing on the case is not expected to take place until early 2018, unless MasterCard decides to settle it out of court. Editor’s Note: Information from Time Magazine, Fortune Magazine, USA Today and Slate Magazine was used in this report.