Wells Fargo Net Service Accused of Racial Bias

A lawsuit filed in a Dallas, Texas federal court accuses Wells Fargo Bank of using the Internet to discriminate against minorities and encourage racial segregation.

According to published reports, the allegations are centered on Wells Fargo’s “Community Calculator,” an online search engine designed to assist prospective home buyers in choosing neighborhoods where they would like to live.

The Association of Community Organizations for Reform, a nonprofit group that recently filed the suit, alleges that the San Francisco, California-based Wells Fargo uses racial descriptions to categorize neighborhoods described as downtrodden.

Steering Minorities?

The suit also alleges that the site steers “residents of predominately minority ZIP codes to other predominately minority ZIP codes.” Conversely, the site allegedly directs residents of white neighborhoods to other white neighborhoods.

In a sample submission, the E-Commerce Times found that Wells Fargo’s Internet descriptions include “Urban Working Families,” which it defines as “the working poor.” The bank’s site also outlines the buying habits of each demographic group.

For example, the site says that Urban Working Families “are top-ranked for making purchases of major household appliances such as grills and climate control machines, and buying educational toys. They also tend to spend on takeout Chinese, men’s sportswear, warm-up suits, casual shoes, and baby products.”

Wells Fargo’s site also describes the buying habits of its “Low Income” category this way: “They also tend to purchase fast food and takeout food from chicken restaurants. This market ranks high for using pest control services. Media preferences include watching television programs such as America’s Most Wanted and Family Matters, however, they tend not to rent videos.”

Is It Stereotyping?

These kinds of descriptions have caused Michael Daniel, a Dallas attorney who filed suit on behalf of the nonprofit group to cry foul.

“They are including some of the worst racial stereotypes possible,” Daniel said in published reports. “With all the fuss about police profiling, can you imagine what would happen if this sort of thing were on a cop Web site?”

In a statement, Wells Fargo said that the bank is just trying to help buyers find the right place to live — not discriminate.

Additionally, the bank said the Community Calculator “is designed to help customers make informed buying decisions using criteria such as education levels, housing characteristics, household by type, and crime indexed to population. The Community Calculator is not designed to use race as a tool to guide home buyers’ decision making.”

CACI Market Systems developed the neighborhood profiles listed on the Web site.

Meanwhile, the suit, alleging violations of the Fair Housing Act, is seeking a court order that would force Wells to remove the racial descriptions from its Web site and “any other appropriate relief.”