Wells Fargo To Appeal Overdraft Ruling - NBC Bay Area

Wells Fargo To Appeal Overdraft Ruling



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    Police say that a man entered a Wells Fargo in Cupertino, forced his way behind the counter, and left with an undisclosed amount of cash.

    A spokeswoman for Wells Fargo Bank said Wednesday the institution will  appeal a ruling by a federal judge in San Francisco requiring it to pay  California customers $203 million for unfair overdraft fees.

          U.S. District Judge William Alsup said in a 90-page ruling Tuesday  that the bank manipulated the way it processes overdraft fees in an "unfair  and deceptive way" for the purpose of maximizing fees.
    Richele Messick, a spokeswoman for San Francisco-based Wells  Fargo, said, "We are disappointed with the judge's ruling.
    "We don't believe the ruling is in line with the facts and we plan  to appeal," Messick said.
    Alsup ruled in a class-action lawsuit filed in 2007 on behalf of  the bank's California customers.
    Richard Heimann, a lawyer for the customers, said, "These unfair  practices cost California consumers huge amounts of money, and we are pleased  that the court has ordered Wells Fargo to return $203 million of its  ill-gotten gains to its customers."
    Heimann called the decision "a symbolic victory for consumers  throughout the country who are subjected to these kinds of oppressive  business practices."
    Alsup, who held a two-week nonjury trial on the lawsuit in  February, said Wells Fargo engineered its posting of a customer's debit card  purchases each night so that the largest purchase is always counted first.
    Many banks use the opposite system, posting the smallest items  first, the judge said.
    Wells Fargo's system meant that a customer could have multiple  overdrafts, perhaps as many as 10 per day, instead of just one overdraft for  the largest item, Alsup said.
    The judge also said the bank was deceptive about the practice.
    "The bank went to considerable effort to hide these manipulations  while constructing a facade of phony disclosure," he wrote.
    Wells Fargo's current overdraft fee is $35. Alsup wrote that the  bank - the nation's fourth largest in terms of assets - took in more than  $1.4 billion in overdraft penalties in California between 2005 and 2007.

    Bay City News