Home Social Wells Fargo Blindsides Customers By Charging Thousands In Overdraft Fees On ‘Closed’...

Wells Fargo Blindsides Customers By Charging Thousands In Overdraft Fees On ‘Closed’ Accounts

818

It seems like barely a quarter goes by without Wells Fargo being exposed for some abusive practices, like opening millions of fake credit card accounts, or selling customers of its auto loans insurance that they didn’t really need (but that the company insisted they did).

In the latest violation, the New York Times reports that Wells Fargo continued to charge overdraft and other charges to customers even after closing their accounts for one of a myriad reasons.

Breaking News

Be the first to know when big news breaks


The paper used Xavier Einaudi, a small business owner who banked with Wells, as its primary example. A few months back, the bank informed Einaudi that it would be closing all 13 of the checking accounts he had with the bank related to his roofing company, CRV Construction. When asked why it was closing the accounts, it replied that the issue was “confidential”.

Anyway, Einaudi went to his local Wells branch and picked up a check compensating him for the contents of the accounts. One June 27, the bank said, the accounts would go defunct, and no more transactions would be allowed.

As it turns out, that wasn’t exactly the case.

Shortly after the closure date, Einaudi realized that Wells had kept some of the accounts active with a zero balance. Meaning that some of Einaudi’s payments to vendors like his insurer and his Google advertising accounts continued from the empty accounts. But this time, each transaction was accompanied by a $35 overdraft fee.

By the time Einaudi realized what was going on, he had wracked up thousands of dollars in overdraft fees.

Payments to his insurer, to Google for online advertising and to a provider of project management software were paid out of the empty accounts in July. Each time, the bank charged Mr. Einaudi a $35 overdraft fee

Mr. Einaudi called the bank’s customer service line. He went to his local branch. Nobody could help him. “They told me, ‘The accounts are closed out – we cannot do anything.'”

This left Einaudi in an untenable position: The accounts were technically closed, but he was still being hit with overdraft fees that nobody at the bank could make stop. By the middle of July, he owed the bank nearly $1,500.

Fortunately for him, Einaudi wasn’t alone with this problem.

Xavier Einaudi

As it turns out, Wells has failed to address these complaints from customers and employees, including one in the bank’s debt-collection department who grew concerned after being hit by an estimated $100,000 in overdraft fees over eight months. Customers say the bank should wipe these fees, since they were unfairly and arbitrarily charged on accounts that the bank had deliberately closed without its customers requests.

It’s not clear, exactly, how many customers have been affected by this glitch. But many angry customers have filed complaints with the Consumer Financial Protection Bureau.

Robust discussions about the issue have continued on websites like Reddit and Quora, while some have expressed their misgivings with Wells.

“I don’t even know what happened,” he said.

According to the NYT, Einaudi’s problem stems from the way Wells’ computer system processes closed accounts: Accounts that customers believe to be closed can, in fact, stay open for months past their closure date if there’s a balance, even if the balance is negative (from fees charged by the bank).

And each time a transaction involving these accounts happens, the banks tacks on a fee.

Since the financial crisis, Wells has paid more than $15 billion in settlements to resolve investigations into its misdeeds, including the ones described above. With more of these scandals surfacing, who is going to step up and take the top job at Wells, particularly when you’d be liable to be blindsided by scandals like these, that hurt ordinary Americans.

via zerohedge

3 COMMENTS

  1. With Chase bank forgiving and cancelling all debt on credit cards in Canada and then pulling out of that country, and sticking this credit card debt on to Americans, it’s time to start filing complaints against these big banks for banking and insurance fraud.

  2. This should not surprise anybody has accounts with Wells Fargo, BOA, Chase or any other major bank company. The above article has been going on for a long time. The American public has been duped for a long time just as Canadians have been. Oh this will not be the last thing as banks will do whatever it wants to get money from customers and reinvest to protect their interests from being taken. I think this is a major scam and Americans need to know. I like most Americans who have had accounts with these big banks quickly check their accounts online then move on to other sites. Unfortunately for consumers banks know this and will do whatever they can to secretly do this to gain income scamming the public. This is the technology age and have to be more vigilent. If one is not vigilent sooner rather than later the banks can make you accontable for those fines and court will back them up. I have had tthis happen to me 3 times and is very stressful and time consuming to regsolve thus causing one to loose their job as spending to much time fighting banks in court. The old addage buyer beware.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

*