If you bank at Wells Fargo....
Carla Axtman
...it might be time to reconsider and move elsewhere.
Jon Bartholomew, Oregon State Public Interest Research Group (OSPIRG) blog:
An open letter to Wells Fargo:
On August 11, 2010, the U.S. District Court issued an order in Gutierrez v. Wells Fargo finding that Wells Fargo manipulated the order in which it processes checks and debits to maximize the number of overdrafts your customers incur and therefore number of overdraft fees your customers pay. The court said, “[t]he supposed net benefit of high-to-low resequencing is utterly speculative. Its bone-crushing multiplication of additional overdraft penalties however, is categorically assured.”
Yowza.
Wells Fargo is apparently appealing.
Read the rest (there's a lot of info) and send your own letter to Well's Fargo over at OSPIRG's blog.
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2:30 p.m.
Sep 28, '10
I am shocked. Shocked they were so sloppy as to get caught. This is in addition to their policy of supporting non-progressive causes. I left WF years ago and moved my dough and other banking activities to my local credit union.
2:40 p.m.
Sep 28, '10
I'm also a credit union person. I moved to one a few years ago and have been very pleased with it.
5:35 p.m.
Sep 28, '10
credit union almost my entire life. never a single regret. unlike the banks i belonged to (apart from Lloyds, when i was in UK in the Air Force. they were great - 30+ years ago)
2:32 p.m.
Sep 28, '10
They aren't the only ones who do this. Bank of America does it as well. They also use pending items (which they have renamed to "processing") to cause bounces.
So say on Sept 14th you go out to eat. The bill is $45. It sits pending for a few days, which restaurant bills usually do while they await final confirmation on the amount plus tip. You have $50 in your account before this goes through, leaving you with $5.
On September 18th, your car insurance shows up pending so that it will go through on the 20th, which is the actual day it is paid.
On the 19th, the restaurant bill clears. Your car insurance is still showing pending. You get an overdraft on the restaurant bill because your "available balance" is below $0.
That night your direct deposit for $1500 hits.
The next day your insurance payment goes through.
So BoA just charged you an overdraft fee based on an item that came later, which never actually "bounced" in the first place because there was enough money in there when it cleared.
2:55 p.m.
Sep 28, '10
I'm surprised, because I thought all banks have done this for years...
2:58 p.m.
Sep 28, '10
If I understand this correctly, say I have $100 in my account and my daily debits are $10,$10,$10,$10,$10 and $100, instead of debiting the $10 transactions first to leave a single overdraft, they debit the $100 transaction first to create 5 overdrafts( each of the $10's).
What to go aholes. This is why I want a better distinction between "Big Business" and your local business. As a business owner, and accountant, never in a million years would I have thought of this and NEVER would I have implemented it.
I need a good CU in Salem! ( a soon to be ex-WF customer)
8:03 a.m.
Sep 29, '10
Michael:
I use Unitus and have been very happy with them. They have a Salem branch on Market St.
8:58 a.m.
Sep 29, '10
Thx for the info. Will keep them in mind.
3:22 p.m.
Sep 28, '10
There are other reasons as well to do business with community based banks and credit unions. They invest in the community, in businesses, home purchase, and other needs. The big banks make their money off of huge credit card interest rates, and avoid small buiness lending.
4:52 p.m.
Sep 28, '10
Well, I bank at Chase and I just heard that they want to be "REIMBURSED" for buying WaMu!! WTF?!?
4:55 p.m.
Sep 28, '10
I think I just got a letter from Umpqua Bank saying they were switching to that method.
Checking...
5:10 p.m.
Sep 28, '10
Scratch that.
The letter from Umpqua said they took notice the Wells Fargo court case and they process deposits first, and simultaneous debit transactions low-to-high, the opposite of what Wells Fargo has been noted doing.
9:51 p.m.
Sep 28, '10
Carla, thanks for posting this. Yes, Umpqua had been doing the high to low, and just last week they changed their policy. They deserve kudos for changing, but it's still alarming they were doing it.
Most of the big banks do this, it's just that Wells Fargo was the first to have a ruling in court. There are pending lawsuits against Bank of America and Wachovia that I know of. Probably more.
10:40 p.m.
Sep 28, '10
I left WF years ago & switched to a CU after WF screwed with union workers in CO.
9:12 a.m.
Sep 29, '10
Hey, if anyone here has been hosed by Wells Fargo and is willing to go on TV to tell your story, please get a hold of me ASAP!! jonb at ospirg . org
2:08 p.m.
Sep 29, '10
I think we need to be careful not to knock all big banks just because they're an easy target.
First, the notion that big banks don't lend to small businesses is utterly false. As one who works directly with banks to find programs for small businesses, there are many choices out there. (Of course, the difference today from five years ago is that banks aren't going to loan money willy-nilly without the borrower having sufficient equity or collateral.)
Wells Fargo, for example, has been a great partner in Central Oregon and offers an "Equipment Financing" program specifically designed for small companies. It's been utilized, and the application is one page! Wells Fargo also offers SBA loans. I have great relationships with many of the local managers of big banks, and find them all to be honest, well-intentioned members of the community.
Many of the smaller, and/or community banks are less likely to loan right now because their balance sheets are still out of order because of residential loans, or their capitalization isn't strong. That's not the case with all small banks, but many of them.
I'm certainly not defending Wells Fargo in regards to the issue Caral brought up. As a former journalist, I did an in-depth series on hidden bank fees, and how all banks - big and small - can be deceptive or not as forthcoming as they should be on all kinds of fees and charges.
On a personal note, my wife and I have banked with Wells Fargo for nearly 10-years and have always had a good experience.
3:56 p.m.
Sep 29, '10
I'd be interested to know how many of those SBA loans were specifically funded through $ they got via ARRA.
6:03 p.m.
Oct 1, '10
Big banks like Wells Fargo and Bank of America should not result to "trickery” masked as "pending transactions” to increase its revenue. The August 11, 2010 ruling against Wells Fargo, although being appealed by the bank, is a step in the right direction. Why do some Americans businesses and government support these deceptive practices? Gigantic bonuses and extremely large paychecks have replaced integrity and a “fair deal” in the name of "capitalism".
2:09 p.m.
Sep 29, '10
Second to last paragraph...
Should say "Carla". Sorry for that!
2:43 p.m.
Sep 29, '10
I'm totally unsurprised. I hate going to Wells Fargo, it is impossible to go to a teller without them trying to sell you something, they're required to do it.
I'm ready to switch too, if anyone has suggestions. Only problem is I am within easy walking distance of the branch in the Woodstock Ave Safeway right now, so I can easily get out cash without having to worry about ATM fees. Are there any good alternatives in the Woodstock neighborhood?
8:12 a.m.
Sep 30, '10
Nick, if you switch to a credit union, they never charge you a fee for using any other ATM, and if you go to another credit union's ATM, that one usually won't charge you for using it. Also, I believe that there's some deal where the ATMs in 7/11 stores are part of the same credit union network and don't charge fees.
3:15 p.m.
Sep 29, '10
I'm totally unsurprised. I hate going to Wells Fargo, it is impossible to go to a teller without them trying to sell you something, they're required to do it.
Funny, in all the years I have been a WF customer, I have never had that happen. Must be a Portland thing.
3:31 p.m.
Sep 29, '10
Seriously? Consider yourself lucky. My friends who bank there and I get it all the time. It's always "you qualify for our _ credit card" or "_ kind of account" or "have you tried _ service we offer?", all of which I guarantee make even more money for WF and are otherwise a rip-off. I can't stand it.
3:38 p.m.
Sep 29, '10
It's always:
Teller: How can I help you? Me: I would like to deposit these checks Teller: (polite chit chat while working) Teller: Can I help you with anything else today? Me: Nope, that's it. Teller: Have a nice day. Me: Thank you, you too.
I guess I should consider myself lucky.