Joel Rosenblatt and Karen Gullo
August 12, 2010
A judge ordered Wells Fargo & Co. to stop manipulating debit-card transactions without consumers’ knowledge to increase revenue from overdraft fees while ruling the bank should pay about $203 million to customers because of the practice.
U.S. District Judge William Alsup in San Francisco sided with three customers who sued in 2007 on behalf of thousands of Californians charged overdraft fees. In a ruling yesterday, he agreed that the practice was unfair, deceptive and fraudulent.
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In 2001, Wells Fargo, the largest U.S. home lender, changed the way it treated daily debit transactions and cash withdrawals so that transactions with the highest dollar amount posted first, rather than in the order they occurred, according to the complaint. The practice, allegedly intended to boost revenue from overdraft fees, led to customers overdrawing accounts by small amounts multiple times a day, according to the complaint.
This article was posted: Thursday, August 12, 2010 at 8:51 am