Seems that a long kept secret is out. Seems like Wachovia (NYSE WB), Wells Fargo (NYSE WFC) and many other banks have gotten caught with their hands in the cookie jar. While banks have often been once removed from “illegal merchants” it seems regulators have wised up to the practice of looking the other way when it comes to bad activity.

For years, nutritional products, health care subscriptions, and many other supposed “opt-in” services have gotten away with virtual murder by charging unsuspecting clients and continuing to operate their merchant accounts with well known banks. Well, it seems as the public has gotten more frustrated over banks turning a blind eye, the government is starting to take notice of these rackets and has put the blame squarely on the once-protected banks who issue the merchant accounts.

If you ever saw a charge on your bank statement for some monthly subscription where the merchant claims you opted in but have no knowledge or memory of ever offering approval, or better yet, only offering your go ahead on a one time fee, then this has affected you. The reality is that banks have profited billions of dollars over the years by allowing merchants to exceed the legal limits by accepting merchants claims that “our policy clearly states no refunds” or my favorite “our policy clearly states there is a monthly fee”, when in reality it’s just outright merchant fraud.

I hope Congress passes laws ensuring that banks should have some level of “real” responsibility because as it stands now, while banks are removed, while consumers are somewhat removed, it’s the legitimate merchants who end up paying higher rates because banks allow this type of activity.