Wells Fargo's Computer Kept Charging 'Overdrawn' Fees On Supposedly Closed Accounts (startribune.com) 129
The New York Times explains a new issue by describing what happened when Xavier Einaudi tried to close his Wells Fargo checking account.
For weeks after the date the bank said the accounts would be closed, it kept some of them active. Payments to his insurer, to Google for online advertising and to a provider of project management software were paid out of the empty accounts in July. Each time, the bank charged Einaudi a $35 overdraft fee... By the middle of July, he owed the bank nearly $1,500. "I don't even know what happened," he said.
Current and former bank employees said Einaudi was charged because of the way Wells Fargo's computer system handles closed accounts: An account the customer believes to be closed can stay open if it has a balance, even one below zero. And each time a transaction is processed for an overdrawn account, Wells Fargo tacks on a fee. The problem has gone unaddressed by the bank despite complaints from customers and employees, including one in the bank's debt-collection department who grew concerned after taking in an estimated $100,000 in overdraft fees over eight months...
Most banks program their systems to stop honoring transactions on the specified date, but Wells Fargo allows accounts to remain open for two more months, according to current and former employees. Customers usually learn what happened only after their overdrawn accounts are sent to Wells Fargo's collections department. If the customers do not pay the overdraft fees, they are reported to a national database like Early Warning Services, which compiles names of delinquent bank customers. That often means a customer cannot open a new bank account anywhere, and getting removed from the lists can take hours' worth of phone calls.
Current and former bank employees said Einaudi was charged because of the way Wells Fargo's computer system handles closed accounts: An account the customer believes to be closed can stay open if it has a balance, even one below zero. And each time a transaction is processed for an overdrawn account, Wells Fargo tacks on a fee. The problem has gone unaddressed by the bank despite complaints from customers and employees, including one in the bank's debt-collection department who grew concerned after taking in an estimated $100,000 in overdraft fees over eight months...
Most banks program their systems to stop honoring transactions on the specified date, but Wells Fargo allows accounts to remain open for two more months, according to current and former employees. Customers usually learn what happened only after their overdrawn accounts are sent to Wells Fargo's collections department. If the customers do not pay the overdraft fees, they are reported to a national database like Early Warning Services, which compiles names of delinquent bank customers. That often means a customer cannot open a new bank account anywhere, and getting removed from the lists can take hours' worth of phone calls.
Wells Fargo has to be the crookedest bank ever (Score:5, Insightful)
Yet, not a single person that counts is being prosecuted.
Re:Wells Fargo has to be the crookedest bank ever (Score:5, Interesting)
It's bizarre. I doubt Wells Fargo has a handful of senators in their pocket or something, as that would require a level of competence they've never demonstrated in any aspect of their business, so why are they even still allowed to be a bank?
Wells Fargo's primary business, near as I can tell, is widespread fraud. They may also do some banking on the side, but that seems like an afterthought. The entirety of their senior management should be in prison.
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It's bizarre.
Actually, it's perfectly normal. This is business as usual in the finance industry, lacking only the subtlety of our present day government. And the last thing to assume is incompetence.
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Actually, it's perfectly normal. This is business as usual in the finance industry, lacking only the subtlety of our present day government. And the last thing to assume is incompetence.
And they will be shocked and horrified when people start closing accounts with a shotgun blast to the face of a board member/CxO. When those whose job it is to enforce the laws refuse to do their jobs, people will begin taking the law into their own hands.
I don't endorse or encourage such actions, just pointing out that there are eventual consequences.
Strat
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Well, before you go all shoot-em-up on then, try voting their lawn jockeys out first.
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I don't endorse or encourage such actions, just pointing out that there are eventual consequences.
Well, before you go all shoot-em-up on then, try voting their lawn jockeys out first.
Reading comprehension, much?
Strat
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Yeah yeah, we know all about the boilerplate disclaimers.
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And they will be shocked and horrified when people start closing accounts with a shotgun blast to the face of a board member/CxO.
If existing customers, after all the bad press Wells Fargo has garnered in the past five years, haven't closed their accounts peacefully already, what makes you think they're going to close them for any reason, at any time, using any method, in the future?
People still doing business with Wells Fargo are a strange, but docile, breed indeed.
Re: Wells Fargo has to be the crookedest bank ever (Score:2)
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Wells Fargo has demonstrated their competence over and over again. What they haven't demonstrated is any sense of honesty or decency. They have demonstrated their competence over and over again in the many ways they have found to screw over their customers (and in some cases non-customers).
At this point, suggesting that Wells Fargo's actions are mistakes is deeply misguided. The number and scale of these
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Now if you want to close the account you will have to settle the outstanding amount.
What you need to do is keep all the paperwork, get confirmation of the account closure and balance, and when this shit happens send them all the documentation and a letter from your lawyer stating that if they don't close the account as instructed you are going to sue.
Then the problem magically goes away.
There are plenty of websites which will allow you
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Wells Fargo has demonstrated their competence over and over again.
Seems to me like they should have been the ones listed on Early Warning Services years ago. I can't remember hearing anything good about them this entire decade, only bad after bad.
Comment removed (Score:5, Informative)
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I'm sorry. My whole point is that they are NOT incompetent... Everything is working out in their favor. All incompetence is much closer to home than people will apparently admit.
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5th/3rd bank did the same thing to me back in 2009. I closed my bank account when merging accounts with my wife, but when transferring all of my recurring payments I missed two magazine yearly payments. 5th/3rd essentially reopened my accounts and charged them, which were obviously then overdrawn since they had $0 balances. Even after complaining they refused to rescind the fees.
We then closed my wife's account too and moved over to Chase. I always had the feeling that Chase would do the same thing to us to
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Get a copy of your credit report? I bet you money they put it in collections and you may have a surprisingly call with an asshole demanding several thousand dollars in late fees and hounding your family and HR department for money.
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When I close an account, I do it in writing, and include the following:
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I avoid any recurring payment that sources from my bank accounts.
I take that a step further and refuse to let businesses pull from my account for any reason. Recurring withdrawals are a great way to lose oversight of your finances, once you expect them to be there they just kind of escape attention.
Rearranging payments, or transferring funds for a day, to avoid a temporary zero balance is a hassle, too.
I won't even use my debit card for most transactions -- certainly never for gas, rarely for POS. If someone fraudulently uses my debit card, I've lost access to my cas
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I had a similar thing. My original bank decades ago was acquired by Wells Fargo. One account sort of got dropped and forgetten about, until I got a notice a couple years later and saw that it had a -$50 balance. They had been applying the monthly fee for being below the minimum balance all the time. And I had to pay the $50 before the account could be closed.
However, friends told me that other banks did exactly the same thing.
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Banks suck, I worked for one for a LONG time and the shit they made me code would make your toes curl.
I now no longer work for financial institutions, I am not exactly a moral upstanding citizen, but banks and investment companies are pure fucking evil.
Banks love money, especially your money.
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Of course they haven't. The 2008 stock market crash should have landed half of manhattans financial elite in prison for very long periods of time. Literally billions of people suffered extreme hardships around the world as a result of wall street brokers fucking around with fantasy financial products consisting of irresponsible mortgages. Nothing. One or two people taken down at most.
Again, the Paradise papers implicated all the biggest companies in t
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Well yeah. But bringing back the Guillotine for our modern financial aristocrats might bring unwelcome attention from the Fuzz I suspect.
The real problem is money in politics. Both major parties are neck deep in financial chains to big spending lobbyists who have created a system where no politician would dare cross them or face being driven out of washington. Meanwhile any real chance of a public revolt against it is completely neutered by social media algorithms that constantly push conspiracy theory nons
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I think others are as bad or worse, they just get away with it because the microscope is pointed elsewhere.
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Re: Wells Fargo has to be the crookedest bank eve (Score:2)
Doesn't sound very scammy to me. The expected behavior if a transaction is attempted against a closed account, is for the transaction to be denied. Whereupon the creditors would prompt their customer to update his payment info. Perfectly harmless.
Nope, this is Wells Fargo defrauding their customers on a large scale. Racketeering basically. Too bad our government is too corrupt to do anything about it.
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If it helps (probably doesn't) the conversation, WF is definitely not the only bank to do this. I "closed" an account with BofA a few years back, then got a $45 overdraft notice a couple weeks later. Went in and they said they will not close the account until it hasn't had a transaction for some set period of time. Apparently it was some BS $5/month subscription that was charging to my bank card.
I asked what they would do when they finally no shit really truely close my account if I had a positive balance
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I could forgive Wells Fargo honoring or mishandling a post-close request from a third party creditor. But when I closed my Wells Fargo account 20 years ago (I got sick of their monthly "low balance" fees), they dutifully closed the account, and I walked out with the cash that was left over in my account. Sounds good so far? Well the next month they sent me a notice that my account had accrued another "low balance fee" and was now in the negative, so somehow I owed money. These weren't spawned by a third par
Not all Americans hate government (Score:3)
On a more serious note I never understood this about Americans (the united variety in any case). They are so distrustful of the government and defer to "the market" for so many solutions while all the evidence points to them being continuously screwed over by the latter and very little by the former.
You are painting with too broad a brush there. You are mistaking conservative philosophy for that of all Americans. Only SOME Americans are deeply distrustful of government and those folks tend to reside more on the political right and they are the ones that tend to be most virulently anti-tax. Folks on the political left tend to distrust private enterprise and while they might not like taxes they tend to be less opposed to them. If I had to explain the difference between democrats/liberals and republic
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Never mind that if you think about it for half a second these politicians with an anti-government platform are basically arguing that they themselves shouldn't be trusted to govern - so there is that
Republicans: Government can't do anything right. Put us in charge and we'll prove it!
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They favor all sorts of government programs (military, medicare, farm subsidies, social security, etc) if you ask them about specifics
I would say many of those things conservatives feel they "have to" champion, not because they're good ideas, but because society and government has come to grow around them and rely on them, such that removing them would be devastating. So you're stuck with them.
You can, for instance, be philosophically opposed to a forced government retirement program (like Social Security), yet know that if you damaged SS, it would be an enormous negative impact on a huge number of people, many of which vote conservative.
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You are painting with too broad a brush there.
Well, only 17% of Americans currently, "trust the govt in Washington always or most of the time." So no, the brush used is of appropriate size.
For anyone who cares here [people-press.org] is the link.
Most amazing thing about bank "errors" like this (Score:5, Insightful)
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Yes, indeed. Errors happen in both directions -- how can you believe something that always works to the makers favor is a mistake?
WFC possibly likes this "mistake" even if they seldom get paid: They get to charge fees that immediately show on the Income Statement and only later appear as "uncollectable receivables". IOW over-the-line window dressing becoming fraud.
Re:Most amazing thing about bank "errors" like thi (Score:5, Interesting)
I don't know. I had this happen to an account that I closed because of an issue I had with Wells Fargo. When I got the bill for the overdrafts I called them and said "no this is not my bill I closed my account on X date." I am not sure if they paid for the transactions out of their pocket or not, but I never heard another word about it.
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They will then just sell it to a debt collection agency who will add thousands of dollars in late fees
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Much like scammers they got rid of the fees (because let's face it, they hadn't spent any money on you) and moved on the next mark who will just pay the bill he's sent.
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Sounds like criminal business practices (Score:3, Informative)
At the very least deceptive. In a sane system, the bank has to give a final balance at a certain day and it is legally prohibited from doing any transactions on that account afterwards.
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At the very least deceptive. In a sane system, the bank has to give a final balance at a certain day and it is legally prohibited from doing any transactions on that account afterwards.
In a sane system, yes - but remember, the US banking system is far from sane. The system is still check based. When paying a bill, you send a check to someone who then has to cash it in their bank, which will then get the money from your bank.
This can take a couple of days, and thus it makes sense to add some grace time when closing an account.
IIRC, electronic bill payment in the US is also check based - by giving your payment provider/bank the ability to write checks on your behalf.
In a sane system,
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IIRC, electronic bill payment in the US is also check based - by giving your payment provider/bank the ability to write checks on your behalf.
It depends on the institution. Many now have non-check-based relationships, but that isn't ubiquitous. I can pay for my AT&T bill instantly from Chase, but not so much my credit cards. My other credit union... I think everything is still check-based, given the three-day delays.
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In a sane system
Please stay on topic. We're talking about a bank in the United States here.
SCUM (Score:3)
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I suspect all banks do this. Wells Fargo is not in some special category of evil banks, because they're all in that category. A credit union might be better than average but they come with a host of other inconveniences. I'm still a customer, and mostly because all the other choices are bad as well, as well as having other drawbacks (fewer ATMs, more fees).
Don't see how the customer could be liable (Score:5, Informative)
I can see it being a problem if you hold multiple accounts with the bank and you close just one of them. Then the bank might be able to come up with a legal argument when you're still liable. But that's why I hold accounts with multiple banks, and I generally close all my accounts with one bank at once.
Re:Don't see how the customer could be liable (Score:5, Informative)
Re:Don't see how the customer could be liable (Score:5, Interesting)
2. If they do that, you can sue them for damages under the FCRA [nolo.com]. So if you got turned down for a loan due to their false info, not only would you not owe the money they claimed you owed, but they would owe you money for any damages you suffered due to being unable to get the loan (e.g. loan was needed to buy new equipment for a $10,000 contract job, causing you to lose $10,000 in income). In fact a strongly worded letter to the bank asserting your rights under the FCRA will probably get them to withdraw the false credit report on their own thus fixing (1) without you even having to file a dispute.
Most of the time the bank or company is just hoping you're ignorant and don't know that you have the legal upper hand, and will fold and pay.
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How many people have signed up for "free" (or other) credit monitoring under which they agreed to binding arbitration for any disputes and can no longer sue through the courts?
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Ha!
The debt collectors won't care. They will go after you and keep adding many late fees and YOU MUST pay to have them go away. It's rediculous but banks and hospitals do this shit all the time.
If you they call asking you if you are Mr such and such who had an account and you said yes you just admitted guilt in a court of law. They can use this in court to prove to admitted you owed that money to the bank.. it's a very dirty business
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you can sue them
Ahh is there anything more American than thinking the market will sort out problems simply because you can sue someone! Well yeah I can think of a few things involving flags, anthems, guns, but this is a close second.
The reality is that sane systems around the world firstly have regulations that prevent this, and secondly have *regulators with teeth*. I once had a problem with a bank that didn't close my account. I didn't need to seek legal advice, I didn't need to pay a lawyer to start proceedings, I didn'
Re: Don't see how the customer could be liable (Score:2)
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In other words, extortion on the banks part and libel and slander from the reporting agencies (wanton disregard for the truth).
credit cards can let old vendors still bill you (Score:2)
credit cards can let old vendors still bill you even after closing them.
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It's actually even worse, since it was the bank that closed the accounts to begin with, and refused to provide a statement of why they were closing them.
https://www.zerohedge.com/news... [zerohedge.com]
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The same way you're liable for identity theft. If someone obtains my info and establishes credit in my name, I was never a party to the transaction but somehow my credit report shows the damage?
In a just world, there would be no such crime as "identity theft" because in order to be a victim I'd have to be involved. The actual crime committed is fraud, and the victim is the bank that gave the credit to someone without sufficient verification. I was never there.
It's like if I printed checks supposedly drawn o
Legal corruption (Score:3)
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Re: Legal corruption (Score:2)
Two options (Score:3)
Option 1, if this is to be taken as an error rather that deliberate fraud and extortion, Wells MUST cancel any overdraft fees on any account that was supposed to be closed. It must get any adverse report to any agency (public or private) expunged at their own expense and by their own effort (the former customer must nit be required to take any action at all), and any former customer who has been adversely affected by the false negative report must be fully compensated.
Option two, prosecute Wells for fraud and extortion. Any agency reporting negative credit information from Wells or incorporating any such information into a "credit" or "risk" score of any kind must either stop doing so or be prosecuted as accessories to the extortion.
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Getting a physical letter from Wells Fargo signed by a manager showing the account as closed with all the details.
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Option two, prosecute Wells for fraud and extortion.
Who should do that? The government? The one that bailed them out due to their own incompetence?
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Should, unfortunately, doesn't mean will.
Report cards as stolen (Score:3)
Next time I close a bank account or change banks, I'm reporting my debit cards stolen 3 days before I actually close my account.
Re: Report cards as stolen (Score:2)
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Wells is paranoid about "reputational risk" (Score:4, Interesting)
If you work at Wells Fargo, you know that they require training about practices that might be seen as infamous. At the top, the company is divided into functional units that provide direct lines to call for employees who notice a practice exactly such as this, where customer intent is clearly not respected.
So, it's interesting that something like this is even occurring. Very interesting. What happens to people who call those direct lines, if bad things like this just keep seem to happen for month after month, year after year?
Not good.
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The problem may be that such things are automated with computers. Then most employees don't ever see such an issue.
My Only Experience With Wells Fargo (Score:5, Interesting)
Was last year when I discovered someone can open an account in another person's name with no ID, deposit some money in it, then start making deficit withdrawals, going into the negative.
I discovered this when I got a letter from WF congratuating me on my new account. Apparently the person did have my mailing address, which actually exposed the scam since WF contacted me at my address. As soon as I got the letter I went to the local WF branch and told the manager that I did not open an account. It took weeks, and many phone calls, and two branch visits to get it shut down. I was pleased when I was advised by their fraud dept that I would need "to be able to identify and show which accounts are fraudulent, and which I am responsible for" to tell them THEY ARE ALL FRAUDULENT, I have never done business with WF once in my life.
Checks... (Score:5, Interesting)
Can we talk about how banks make their customers criminals by refusing to honor checks?
If you get a check drawn on Key Bank for $1000 and take it to the same Key Bank branch the account holder opened their account with, they will not give you $1000.
They insist on a fee being taken out from the payment to their customers customer.
If a check isn't redeemable for the face value, legally it's 'dishonored'
Knowingly writing a check that will be dishonored is a CRIME.
I found a credit union that does not do this to people I may write checks to; but how are Banks allowed to violate the basic nature of what a check is? The bank's customer told them to 'Pay X amount to Y person', and the bank is obligated to do so, but they refuse? How the fuck does that fly? If they want to change a fee for check they can do it to their own account holders; not to people their account holders owe money to!
https://www.bankrate.com/banki... [bankrate.com]
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I hate taking a bank's side on anything, but if you're not their customer, there's no reason for a bank to do anything for you for free. A cheque is not cash.
Re:Checks... (Score:4, Insightful)
The check is written by their customer. They are obligated to honor that check (if the funds are there). If they want to charge a "service fee", they may charge THEIR CUSTOMER if they have an agreement that allows it.
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Thank you!
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Re:Checks... (Score:5, Insightful)
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This.
Re: Checks... (Score:2)
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Consider Amazon and UPS; Amazon pays UPS to deliver a book. You're not UPS's customer, Amazon is.
Does UPS have the right to rip out 5 pages?
Logicially, it just doesn't work. They are contracted to deliver X, and they don't deliver X, that's fraud and/or theft.
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I found a credit union that does not do this to people I may write checks to
I'm having flashbacks to 90s movies. You're talking about those bits of paper you sign and rip out of a book right?
Surely you wouldn't waste those like that. They'd be museum pieces and worth a bit by now right? Surely!
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I still write checks. I like having paper trails. The cost is less than automatic payments from a credit card, and easier to manage than direct debit from the account. And there are the infrequent checks. Why set up autopayment for a once-a-year payment that you're likely to forget about? I also contribute to charities, and it's just as easy to write the check as to make the payment online (and easier to prove to the IRS if there was ever an audit). And paying online is insecure.
Checks work, there's
Customer Service... (Score:1)
Wells Fargo? (Score:3)
Just say no...
"Cramming" (Score:1)
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Oh, that’s right... the US Congress doesn’t HAVE those.
Yes, they do. That's what an election is. It's a limit on a term if you choose to vote your congressperson out, or an extension of a term if you vote for that person. If you choose to do nothing, you're abrogating your right to decide.
Nice try at a digression, though.
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Yes, they do. That's what an election is. It's a limit on a term
But term limits, at least presidentially (and what people WANT imposed in other seats of our governmental system), is also a limit on the number of terms, not just how long a particular term, which makes the "elections are term limits" talk, IMO, silly - it misses that very fundamental definition of what is being limited.
Lol, I mean "errr whoops" (Score:2)
Yeah, like this deliberate, calculated, money-sucking behavior wasn't planned and approved at the highest levels.
Well's Fargo will take in X dollars, pay a fine of 0.00X dollars, and go on to their next scheme.
lolololol (Score:2)
You think you own any money? No, it's the bank's money. They give you some limited rights to use it, but eventually they want it back.
Go with a Credit Union (Score:2)
Instead, go with a credit union who is not backed by the feds, and instead will invest CAREFULLY. Nearly all is local instead of overseas in high risk ventures. Things like your home, local businesses, etc.
Professional problem-solver (Score:2)
My local newspaper hires a guy to solve problems like this. If the bank won't close your account, or if a company double-bills you etc., you can email him. He'll check it out, and try to get a resolution for you. Then he'll write an article that tells how he resolved the problem. No company wants the bad publicity of an article that tells how the company mistreated you.
If you have a problem like this, and if your local paper hires a problem-solver to help its readers, you might want to contact that person.
Avoiding payments (Score:2)
Most banks program their systems to stop honoring transactions on the specified date
This reminds me of working in customer service in a bank previously. People would call in and say "I've got a bunch of bills set to come out of my account, I don't want to pay any of them anymore so I'm going to close my account and not tell them about it."
Also reminds me of people who would be using 4-5 payday loan companies, and then they would want to file claims against them and block them from taking future payments.
I always wonder about what fun those people had later on.
I had a bank do somthing similar to me. (Score:2)
I changed banks about 15 years ago. I closed my accounts, opened new accounts at a new bank, moved recurring charges over to it, etc, etc... A short time later, a reoccurring charge that I either missed or didn't switch over in time charged to the account. Rather than doing the sane thing and deny the charge, the bank reopened my account and charged me a overdraft fee. To their credit, they did promptly notify me of the overdraft immediately (to my surprise), and did not give me a hassle about dismiss
Break 'em up! (Score:2)
Re: lets be clear about ChekSystems and your bank (Score:2)
Whereâ(TM)s the system that reports on banking errors? You now, the one that pops up and says âThis bank made errors on 461 accounts this past months which is 15% greater than average ...â(TM)
There isnâ(TM)t one. Only your mistakes are reported. Only you are supposed to take responsibility. Only you have âobligationsâ(TM).
Look at your average financial services contract.
Now, count the number o
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Which is odd since corporations have been judged people by the Supreme Court. I guess it is difficult putting Corporation in jail which only begs the question of why they were judged this way in the first place.