Wells Fargo’s unfair overdraft practices EXPOSED

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We support reforms to the financial marketplace that protect consumers from unscrupulous banks and lenders.

By Consumers Union on Wednesday, August 11th, 2010

In just 4 days the final rule on overdraft goes into effect for existing customers. After August 15th, you will no longer be assessed any fees if you overdraft your account because of an ATM or debit card transaction, unless you sign up.

But for all of you, who have considered opting into these programs, BEWARE. The new rule did not address the fact that banks often manipulate the order that transactions process (clearing them from highest to lowest) to maximize the number of overdrafts and fees that customers incur. If you opt in, you are not protected from this practice.

We’ve been screaming about this for a long time. We asked the Fed to ban this practice in its rule and it flatly refused. There have been bills introduced in Congress that would address this unfair practice, but they have not yet moved. And the banks’ respond in the same way by claiming that consumers want their transactions approved from high to low to ensure their important bills get paid first. Well think again…

On Tuesday, a district court judge wrote a scathing decision which found that Wells Fargo “acted in bad faith” by clearing transactions in a way which generated more fees and revenue at the expense of depositors. Here are some of the best quotes which do a wonderful job of summing up the decision:

“…this order finds that gouging and profiteering were Wells Fargo’s true motivations…”

“…no credible evidence was presented at trial to support the bank’s argument that high-to-low resequencing was deployed [because] customers wanted or benefitted from it.”

Wells Fargo and other banks always insist that overdrafts are the consumer fault. Consumers need to keep track of their transactions better and be more responsible with their finances. They need to maintain a check register and write down all their transactions. Well this is what the court had to say about that:

“The Court has studied [the Platintiffs] account statements and find that it was impossible for her or anyone else to reconstruct how the bank came up with its number of overdrafts.”

“Even if [the Plaintiff] had meticulously maintained a chronological check register of all her transactions (as Wells Fargo insists that she and other customers should), it could not have accurately reflected or predicted…that she was at risk of incurring four overdraft fees…”

Despite the fact that Wells Fargo has now truly been exposed, with internal memos showing that they gouge their customers, the bank wants to file an appeal. So who knows what’s going to happen with this case. But for now, customers should ignore the solicitations from the bank asking you to opt into overdraft “protection” and go tell your bank to be better than Wells Fargo!! If you want to move your money to a bank that’s better to you, make sure to use our tips.


10 responses to “Wells Fargo’s unfair overdraft practices EXPOSED”

  1. […] mortgage borrowers; blackballing whistelblowers; creating 2,000,000+ fraudulent accounts, and stealing millions with fraudulent fees and penalties. […]

  2. […] mortgage borrowers; blackballing whistelblowers; creating 2,000,000+ fraudulent accounts, and stealing millions with fraudulent fees and penalties. […]

  3. […] mortgage borrowers; blackballing whistelblowers; creating 2,000,000+ fraudulent accounts, and stealing millions with fraudulent fees and penalties. […]

  4. […] mortgage borrowers; blackballing whistelblowers; creating 2,000,000+ fraudulent accounts, and stealing millions with fraudulent fees and penalties. […]

  5. […] mortgage borrowers; blackballing whistelblowers; creating 2,000,000+ fraudulent accounts, and stealing millions with fraudulent fees and penalties. […]

  6. […] mortgage borrowers; blackballing whistelblowers; creating 2,000,000+ fraudulent accounts, and stealing millions with fraudulent fees and penalties. […]

  7. […] Fargo didn’t just steal millions from its customers with crooked overdraft fees, didn’t just create 2,000,000 fraudulent accounts and threaten to blackball employees who […]

  8. Aczel Largaespada says:

    This problem keeps happening. Not only they clear the big transactions first but they also make my transaction appear and then make them disappear and clear it three days later. This is a bad practice in my opinion, I am really mad at Wells Fargo and don’t want to deal with them anymore.

    • Jenai Herod says:

      They still do what the like they just took my entire ssi check after returning my normal automatic payments unpaid and refused to work with me when I learned my ssi check was going to be 2 days late because they forgot to update the system after a routine review .I went in in person 2 times to try and stop the overdrafts buy they said to wait until the posting times were completed and come back again to get some of the fees waived and when I went back thinking I would have half of my check left I learned that only 2 charges were reversed for an unauthorized transaction so because I had the 800 number make those 2 reversals the banker at my branch who told me to wait until everything bounced to come back then tells me sorry but can’t help me now so I ended up being 10 overdrawn and spent only about 100 out of a 889 check they literally are keeping every dime of my check in fees and i didn’t have any control over what happened. I was using that Tibet I thought I had from mycheck to fix my car to start a new job and get off disability and was hired already but just need one repair for 300 to earn 1000 a week and wells Fargo just took it away along with my abilityto eat or pay any bills this month because they don’t care about anything but those fees even a stop payment fee cost 31 dollars an overdraft 35 and they let some bills go thru that weteny autirized and paid them but not my car payment or capital one payment and sometimes if I pay mote than the minimum on mycapital one they hold the payment for longer than 5 days and return it unpaid causing me to be late and over the limit after the cc company made funds available but later learned wells Fargo had delayed payment or returned it. Unpaid because of collecting their overdraft fees causing a snowball effect designed to prevent my using my credit card instead of their debit card. I have fought them for paying checks I did not autibrorize from merchants one from a rental car company they paid before asking me that was over 800 and twice the cost of the rental and i disputed it but they refused to stop payment and made me open a new accent now I can’t go to another bank because of it and feel like a hostage. I am ready to find an attorney and file a suit for my severe damages. And tryto get my ssi check into another bank I am sick if these theices leaving me without any money to live on im on ssi and shouldn’t be forced to pay for fees I didn’t deserve and tried to stop bytheir own advice and was still forced to pay even more than I would have if I had been helped the first time I went in was told to just let it all bounce

    • Jenai Herod says:

      They still do what the like they just took my entire ssi check after returning my normal automatic payments unpaid and refused to work with me when I learned my ssi check was going to be 2 days late because they forgot to update the system after a routine review .I went in in person 2 times to try and stop the overdrafts buy they said to wait until the posting times were completed and come back again to get some of the fees waived and when I went back thinking I would have half of my check left I learned that only 2 charges were reversed for an unauthorized transaction so because I had the 800 number make those 2 reversals the banker at my branch who told me to wait until everything bounced to come back then tells me sorry but can’t help me now so I ended up being 10 overdrawn and spent only about 100 out of a 889 check they literally are keeping every dime of my check in fees and i didn’t have any control over what happened. I was using that Tibet I thought I had from mycheck to fix my car to start a new job and get off disability and was hired already but just need one repair for 300 to earn 1000 a week and wells Fargo just took it away along with my abilityto eat or pay any bills this month because they don’t care about anything but those fees even a stop payment fee cost 31 dollars an overdraft 35 and they let some bills go thru that weteny autirized and paid them but not my car payment or capital one payment and sometimes if I pay mote than the minimum on mycapital one they hold the payment for longer than 5 days and return it unpaid causing me to be late and over the limit after the cc company made funds available but later learned wells Fargo had delayed payment or returned it. Unpaid because of collecting their overdraft fees causing a snowball effect designed to prevent my using my credit card instead of their debit card. I have fought them for paying checks I did not autibrorize from merchants one from a rental car company they paid before asking me that was over 800 and twice the cost of the rental and i disputed it but they refused to stop payment and made me open a new accent now I can’t go to another bank because of it and feel like a hostage. I am ready to find an attorney and file a suit for my severe damages. And tryto get my ssi check into another bank I am sick if these theices leaving me without any money to live on im on ssi and shouldn’t be forced to pay for fees I didn’t deserve and tried to stop bytheir own advice and was still forced to pay even more than I would have if I had been helped the first time I went in was told to just let it all bounce. I don’t see how this is legal for them to get paid 35 bucks to refuse an Automatic bill pay item because of a direct deposit being delayed by one day ymthru no fault of my own and several attempts to address it imnediatj upon noticing the ssi check was late but it was too late to stop the auto bill payeven though birmaly theyyaje up to 5 days to clear but this tine yheytmreturned them instantly and its clear they DOWHAT THEY WANT

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