Wells Fargo Fucks Over Customers

[TampaYankee]

Wells Fargo Overdraft Lawsuit: Bank Ordered To Pay $203 MILLION In Fees Over 'Unfair' Charges

(AP, Eileen Aj Connelly) --

A federal judge in California ordered Wells Fargo & Co. to change what he called "unfair and deceptive business practices" that led customers into paying multiple overdraft fees, and to pay $203 million back to customers.

In a decision handed down late Tuesday, U.S. District Judge William Alsup accused Wells Fargo of "profiteering" by changing its policies to process checks, debit card transactions and bill payments from the highest dollar amount to the lowest, rather than in the order the transactions took place. That helped drain customer bank accounts faster and drive up overdraft fees, a policy Alsup referred to as "gouging and profiteering."

The ruling detailed the experiences of two Wells Fargo customers who used their debit cards for multiple small purchases, and were then charged hundreds in overdraft fees because the order the purchases were cleared by the bank depended on the amounts. The judge found the customers, who were part of a class action, were not properly informed of the bank's policies on processing payments and were unaware the bank would allow debit purchases to go through when their accounts were overdrawn.

"Internal bank memos and e-mails leave no doubt that, overdraft revenue being a big profit center, the bank's dominant, indeed sole, motive was to maximize the number of overdrafts," Alsup wrote. That policy would "squeeze as much as possible" from customers with overdrafts, in particular from the 4 percent of customers who paid what he called "a whopping 40 percent of its total overdraft and returned-item revenue."

The judge dismissed Wells Fargo's arguments that customers wanted and benefited from the policies, and detailed evidence he said showed efforts to obscure the practices in statements and other materials. Wells Fargo's online banking system, for example, would display pending purchases in chronological order, "leading customers to believe that the processing would take place in that order."

"The supposed net benefit of high-to-low resequencing is utterly speculative," he wrote. "Its bone-crushing multiplication of additional overdraft penalties, however, is categorically assured."

Alsup also criticized the bank for allowing overdraft purchases after accounts had been drained by offering a "shadow line of credit" that customers were unaware existed.

The decision noted that the Federal Reserve has outlawed some of the practices detailed in the case, most notably debit card overdrafts permitted without customers agreeing to accept overdraft protection.

Judge Alsup ordered Wells Fargo to stop posting transactions in high-to-low order by Nov. 30 and to reverse overdraft fees charged to customers from Nov. 15, 2004, to June 30, 2008, as a result of the policy. A study cited in the decision by a Wells Fargo witness put the restitution at "close to $203 million."

Wells Fargo spokeswoman Rochele Messick said the bank is "disappointed" with the ruling. "We don't believe the ruling is in line with the facts of this case and we plan to appeal," she said.

Messick noted that Wells Fargo changed its policies earlier this year, and customers can no longer incur more than four overdraft charges in one day.

Wells Fargo shares closed Wednesday trading down $1.47, or 5.3 percent, at $26.30, as the broader markets dropped sharply on economic concerns, with banks being particularly hard hit.

The case, heard in the U.S. District Court for Northern California, is Gutierrez vs. Wells Fargo.

http://www.huffingtonpost.com/2010/08/11/wells-fargo-overdraft-law_n_679178.html

[TampaYankee]

Why is it that pure premeditated theft is sanctioned by the Govermenment in that regulators often turn a blind eye and when caught, in this case by active customers throught the courts who refuse to settle for getting screwed, the penalty is oh... you will have to give the money you stold back? Even this happens precious little of the time.

More of the same with the Wall St Big Banks and garbage mortgages scam with the subsequent Wall St meltdown.

If any of these scams were pulled by individual con men they would go to jail but it seems that if such blatant thefts are big enough and committed behind a corporate letterhead then it just aggressive business. Harm but no foul.... Bullshit.

This is the corruption of American Capitalism, not only sanctioned by the Government but abetted by the Government: Screwing the American People is just good agressive business if they are raped by trickery and slight-of-hand, rather than at brazen gunpoint. But then con men don't use guns either.

[Guest Klair]

White collar crime at its finest. In this technological age, unless a customer has requested so-called overdraft protection, I don't understand how overdrafts can go through in the first place. If there is money in the account to cover the purchase,it goes through. If there's not enough, the purchase is rejected. Is there a technological problem about that? Of course, people ought to be responsible for knowing how much money they have in their own bank accounts too.

[TampaYankee]

White collar crime at its finest. In this technological age, unless a customer has requested so-called overdraft protection, I don't understand how overdrafts can go through in the first place. If there is money in the account to cover the purchase,it goes through. If there's not enough, the purchase is rejected. Is there a technological problem about that? Of course, people ought to be responsible for knowing how much money they have in their own bank accounts too.

In view of the new FinRegs, my bank sent me a letter informing me, because of my excellent record, they were extending overdraft protection to my account. Should I wish to decline this courtesy I needed to inform the bank via writing or phone. I was on the phone in a New York minute.

I wonder how many people would put forth the effort to decline who dont really desire this option. Odd that one has to opt out of an option. Makes it seem like the real option is opting out.

Overall, I have no complaints with my bank but I didn't need this.

[JKane]

Wow, that's pretty damn evil, but it was my understanding that this was pretty much the default practice of the banks at the time. Think Suze Orman mentioned it months or a year ago.

I'd occasionally dip into my overdraft protection line of credit (which I knew I was signed up for and didn't incur an overdraft charge) but not more than once every couple of months. Once I really looked at the fees for even that I said screw it and simply started keeping more money in checking. I do still like the overdraft protection being attached though, it's fees are far less than a dishonored check's would be.

I did notice the debit card having a hard limit around when they did it. Kinda annoying when you pull up to an Arco or Coscto Gas with the gas idiot light on and the only method of payment they accept doesn't work!

[BiBottomBoy]

I wonder why he stopped it at June 2008 - mostly because my bank is Wachovia and is owned by Wells Fargo and last summer I got hit with roughly 800 in overdraft charges for a single weekend - because my paycheck was supposed to get deposited on a Friday, and I stupidly assumed it had without checking and did stuff that weekend.

Turned out that Friday was a holiday in America that I'd forgotten about because I live in France so my check wasn't credited until Monday which meant that I had about a dozen overdraft transactions.

Also, is this money going to customers who joined the suit or to all customers?

[Guest Conway]

It ain't just Wells Fargo that does this. I don't keep a lot of money in my regular checking account. Just this week, I forgot to account for my auto insurance draft that come through at the end of the month. Chase structured my checks so as to charge me twice.

[Guest zipperzone]

It ain't just Wells Fargo that does this. I don't keep a lot of money in my regular checking account. Just this week, I forgot to account for my auto insurance draft that come through at the end of the month. Chase structured my checks so as to charge me twice.

You need overdraft protection.

[TampaYankee]

You need overdraft protection.

He needs another bank.

[BiBottomBoy]

Often if you call up and complain about those types of fees they'll remove them.

[Guest lurkerspeaks]

What I do is have a separate saving account at the same bank as my checking account (chase bank). I have them linked together so if by some chance I do overdraft from my checking account, it automatically transfers over from my savings. But I also have an "alert" on the checking account so that anytime it gets below a certain level, I immediately get a text on my cell telling me. I also get daily alerts by email of all activity on my accounts so I can quickly look over them to make sure all charges are legit.

[BiBottomBoy]

I just check my account three times a day because I don't ever want to get burned again.