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Our Banks Are Evil – latest dirtbag: WELLS FARGO

“Wells Fargo used profiteering tactics “

Practically speaking, that meant Wells would deduct the biggest checks, debits and e-bill payments first, regardless of the order in which the customer made them. The practice would often cause accounts to have insufficient funds and trigger overdraft fees for multiple transactions.

OrlandoSentinel.com

Judge says Wells Fargo must refund $203 million in wrongful overdraft fees

By Richard Burnett, Orlando Sentinel

11:05 AM EDT, August 12, 2010

Calling Wells Fargo & Co. “unfair and deceptive,” a federal judge has ordered the banking giant to refund customers more than $200 million in allegedly ill-gotten overdraft fees.

The judge ruled that Wells Fargo used profiteering tactics to manipulate customers’ accounts to generate overdraft fees. The decision came Tuesday in a consumer class-action lawsuit challenging the San Francisco-based bank’s overdraft policies.

Wells Fargo says the case is not over. “We don’t believe the ruling is in line with the facts of this case and we plan to appeal,” spokeswoman Richele Messick told the Associated Press.

Earlier this week, Wells Fargo disclosed in a regulatory filing that it expects to take a $500 million hit on its fee-income this year as a result of new federal limits on overdraft charges.

Wells Fargo’s Wachovia franchise was Florida’s second largest bank in 2009 by deposit market share, according to the latest available regulatory data. It had deposits of $64.3 billion at 724 branches statewide last year.

Wachovia was the third largest bank in Central Florida, with deposits of $8.93 billion at 109 branches in 2009.

In the California suit, U.S. District Judge William Alsup ruled that Wells Fargo used a biggest-in-first-out practice to unfairly generate overdraft fees from customers.

Practically speaking, that meant Wells would deduct the biggest checks, debits and e-bill payments first, regardless of the order in which the customer made them. The practice would often cause accounts to have insufficient funds and trigger overdraft fees for multiple transactions.

The judge ruled that customers were not properly informed of the policies on processing payments and were unaware Wells would allow debit transactions to clear when their accounts were overdrawn.

The bank argued that their overdraft coverage was implemented in response to demand from customers and that many benefited from the protection.

The judge ruled, however, that Wells effectively obscured or hid from customers the actual practices and potential consequences and costs of the overdraft service.

New overdraft rules passed by the Federal Reserve now prohibit banks from automatically enrolling customers in overdraft protection. The rules ban overdraft fees on ATM and debit-card transactions, unless consumers have actively enrolled in the service. Banks may continue to charge overdraft fees on checks and previously-arranged automatic debit or bill payments.

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