FRAMINGHAM (06/30/2000) - San Francisco-based Wells Fargo & Co. is re-evaluating its "community search service" partner Homestore.com Inc. after a Dallas-based organization sued the bank over what it called "explicit racial classifications and racial stereotypes of neighborhoods."
The lawsuit, announced on June 21, was filed in Federal District Court in Dallas and is the first federal lawsuit to allege racial steering over the Internet, according to the Association of Community Organizations for Reform Now (ACORN).
"It's bad enough that Norwest/Wells Fargo banks won't make loans to my neighborhood," said ACORN member and lead plaintiff Ruth Isaac. "But for them to use the Internet to steer people away is racial apartheid."
According to ACORN, Wells Fargo doesn't do business in Dallas minority areas.
Moreover, the organization said the Wells Fargo Web site steered visitors away from certain neighborhoods based on race.
Wells Fargo immediately disputed the allegation that it is biased. It also quickly pulled the link to the offending material from its Web site after it received the complaint, according to company spokesman John Ferchen.
He said the complaint from ACORN was the first one the bank had received about the community search service, which is provided by Thousand Oaks, California-based Homestore.com as well as Arlington, Virginia-based CACI International Inc.
CACI said it will review in detail all of the descriptive information, and said that it "sincerely regrets" that anything on the system would have been viewed as discriminatory or insulting.
Wells Fargo said it has a history of positive relations with ethnic minorities and low-income borrowers.
Analysts say the ACORN lawsuit is a reminder to all online - and off-line - businesses that a company is not only responsible for its own actions but also for the actions of its partners.
"Nobody cares that Wells Fargo didn't create the content," said Jaime Punishill, an analyst at Cambridge, Massachusetts-based Forrester Research Inc.
"As far as customers are concerned, it came from Wells."