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NEW YORK — 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."
Wells Fargo adopted the policies beginning in 2001, and they became widespread across the banking industry. It is unclear how the ruling would apply to the rest of the industry.
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.
More: http://www.google.com/hostednews/ap/article/ALeqM5ixt-XOKihFqxDEV9QlRHl_...
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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.
Four years worth of overdraft fees being refunded. I hope those who get it back are smart and leave the money in their account to stop themselves ever being charged overdraft fees again.
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Phew! That's going to empty the Wells Fargo piggy bank a bit.
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Just think of the interest Wells Fargo made on that money while they had it in the Wells Fargo accounts. They came out on top because of that.
The judge is quite right, that is profiteering. The only reason they changed the processing system was to make money off those customers.
The only reason a great many American families don't own an elephant is that they have never been offered an elephant for a dollar down and easy weekly payments. - Mad Magazine.