There should be a great uproar of joy today as another federal judge in California has come to the aid of the state’s citizens. District Judge William Alsup went as far as to accuse Wells Fargo Bank of "profiteering" in his class action ruling against the banking giant.
The issue was a change in Wells Fargo policies, when the bank made it the rule to process customer’s checks, debit card charges and bill payments each day from the highest amount to the lowest amount, rather than chronologically. This practice resulted in a huge increase in overdraft charges for customers, who, after a large debit was posted, could then be subject to $35 in overdraft charges for purchases of miniscule amounts. Not only that, but the practice virtually assured that customers who went over the amount in their account for any given day would be subject to multiple overdraft charges, at over $30 per charge. Use your debit card to charge $5 and it would cost you $40.
The Judge found that customers were not made aware of the change in policy, especially since their online statements listed charges in chronological order. The ruling will cost Wells Fargo upwards of $200 million dollars, as the ruling orders overdraft charges to be returned to customers who suffered because of this policy, from November 15, 2004 to June 30, 2008.
Wells Fargo vows to appeal, and states that the bank changed its policy earlier this year. According to the bank, customers can now face four overdraft charges per day at the most. Let’s remember that an overdraft does not incur any charge to the bank. Nothing is different for the bank in processing whether your account covers the amount or does not. The only difference is that the bank, which could be reasonable and charge $5 for a matter which does not inflict them in any way. They, however have chosen to charge $35. It’s fairly apparent that if they appeal they’ll lose. For now, I’m just pleased that more of these blood sucking banks are being punished financially for preying on American citizens.
