A federal judge has ordered Wells Fargo to repay customers $203 million in overdraft fees imposed as a result of a “bookkeeping device” that “dramatically” multiplied the number of fees extracted from a single mistake.
U.S. District Court Judge William Alsup of Northern California ruled that Wells Fargo must pay restitution for its unfair use of the single $35 overdraft fee.
“These neat tricks generated colossal sums per year in additional overdraft fees, just as the internal bank memos had predicted,” the Alsup said in his 90-page ruling issued Tuesday. “The bank went to considerable effort to hide these manipulations while constructing a facade of phony disclosure.”
Overdraft fees are the second-largest source of revenue for Wells Fargo’s consumer deposits group, the bank’s unit that services checking accounts, savings accounts, and debit cards. In California alone, Wells Fargo assessed over $1.4 billion in overdraft penalties between 2005 and 2007.
The judge ruled that these manipulations by Wells Fargo “were and continue to be unfair and deceptive” in violation of California laws that oversee the “Business and Professions Code.”
Read Judge Alsup’s ruling.
About that $203,000,000 restitution for unfair overdraft fees.
What about the clients who decided to close their accounts with
Wells Fargo between 2005 and 2007 because of that same reason?
Will they get reimbursed as well?
Greanted, it is refreshing to see an evil institution like WFB finally be fined for one of its many spilelry practices.
But let’s be real, this fine amounts to little more than a public wrist slap; not the sort of punishment that would even remotely begin to prevent a repeat offense.
In fact, to have to pay ONLY a $ 203 million penalty after making $ 1.4 billion over two year on late fees in just ONE state, is more like a REWARD than a fine.
It’s time Americans woke up and conducted more of their business with smaller banks. And if/when increased deposits at these smaller banks result in take-overs by larger banks, then move your accounts again to a smaller bank.
The big banks (like BAC, C, JPM, GS, MS, and WFC) are technically insovent; and if they were again forced to mark their assets (mortgage loans) to market, as they were for decades, they would all have to close their doors.
Just watch what happens in teh year ahead – they’re all toast!
Sparky