AmSouth commits fraud according to Chris Jones

Where did you get your information?
This infomation is now a part of public record in a separate lawsuit in Louisiana's 23rd Judicial District Court. Information on how to obtain copies can be found here or you can view the scanned versions here or read below for some highlights.

Is this information about fraud accurate?
This information was provided by a former AmSouth employee who left AmSouth of his own free will and provided the information voluntarily. Chris Jones, former Vice President of Consumer and Business Scorecard Technology was on the team in charge of fraud detection at AmSouth (dba Regions Financial).

In these court documents, Mr. Jones details several scams perpetuated upon AmSouth customers and stockholders. Below I will explain the inner-workings and potential ramifications of AmSouth's "penny scam" as I understand it.

How does AmSouth's "penny scam" work?
When a customer closes an account at AmSouth (dba Regions Financial), some AmSouth representatives will go through the motions and tell the customer that the account is closed. In reality what happens behind the scenes is that one penny is left in the account, and all automatic fees and mailing of statements are discontinued for the account in an effort to conceal this fraud from the customer.

How often does this happen?
Mr. Jones indicates that approximately one million accounts per year are used in AmSouth's "penny" scam.

Why are they doing it?
I believe there are two reasons. My first theory is that by fraudulently keeping approximately one million "closed" accounts active each year, AmSouth can artificially inflate their market share (number of customers and accounts) to their stockholders.

The second theory is that branch and sales managers use this scam to artificially deflate churn numbers within their branch and/or sales portfolio to achieve bonus thresholds. Churn is a term used to indicate the number of customers who have closed their account(s) during a specific period.

What are state and federal regulators doing about this?
Visit our government watch area to monitor the progress (or lack of progress) by various agencies that have been made aware of the fraud.

What is AmSouth/Regions doing about the problem?
I am not sure. But here is a quote from Chris Jones taken from Exhibit "P";

Both George [Buchanan] and Brett [Couch] are well aware of business banking fraud. I had many heated debates with them about the issues. ... Throw Tom Neely in there as well. I discussed business banking fraud with him until I was blue in the face...

Sales force cheating/fraud/data anamoly was typically perpetrated by sales agents, branch managers, business bankers, city presidents, general sales managers. As always, direction for such fraud usually flowed down hill from the chain of command. Thus city presidents and general sales managers would get pressure from area executives. City presidents and general sales managers would then dissimate bad practices to the branch managers. The branch managers would then encourage their sales agents to commit the bad habits. Collectively they are the sales force. Some are managers, and others are directly responsible for sales to customers.

Chris Jones quote from Exhibit "E";
It was clear that AmSouth was still putting their head in the sand regarding the fraud.

Why should I care?
First, fraud is illegal.

Secondly, many people may have their financial well being at serious risk.

Here is another quote from Chris Jones made in Exhibit "G";

"We never thought that branches would prevent accounts from closing by keeping a penny in them. That is so illegal! Or at least should be... On top of that, many branches waived reocurring monthly fees and stopped their statements without notice. The customer never knew what hit them. AmSouth should be concerned about this risk. If any of these account numbers get stolen, the customer would never know that the account is being used fraudulently."

Customers who have unwittingly been used in this scam are at risk. What if your account you thought was closed is still being used? How will unauthorized account activity effect your credit? Is money being laundered through your account? What is your liability if it is? Can you protect yourself? Do you have documentation from AmSouth that says your account is closed? If not, I suggest you obtain written proof from AmSouth and/or contact an attorney immediately.

How can someone use my account?
Security Expert Winn Schwartau explains it here.