Wells Fargo’s New “Overdraft Fee” Racket: Fraud Still Going On?

Wells Fargo’s New “Overdraft Fee” Racket: Fraud Still Going On?

By Jane Stillwater


Last week the Berkeley branch of Wells Fargo bank started going all ballistic on a friend of mine’s telephone. Night and day, robo-dialers attacked her phone, reminding her over and over again that her account with Wells Fargo was now in collection, that she now owed Wells Fargo a whole bunch of money and that if she didn’t pay up, then her credit would be totally ruined. “Totally ruined!”

How did things come to such a sorry pass? I’m not sure, but I think it may have involved Wells Fargo breaking both local and federal laws — again.

My friend’s telephone nightmare all started when T-Mobile claimed (probably erroneously because she had disconnected her service with T-M months ago) that my friend owed it hundreds of dollars. And as a result, T-Mobile quietly tiptoed into my friend’s Wells Fargo bank account and basically gutted it for everything that was in there — and more. The local branch of Wells Fargo basically handed T-Mobile the farm.

“Here, take everything that this person has in her account and just to make sure that you’re completely happy, we’ll throw in a few hundred dollars more that isn’t even IN her account,” Wells Fargo apparently told its buddies at T-Mobile.


Wells Fargo is now giving away its own money? But why? Why wasn’t the bank following its normal procedure, blocking my friend’s account and telling T-Moblie to get stuffed? As far as I can figure out, it’s because Wells Fargo bank makes a huge amount of their profits from charging overdraft fees.

However, there’s a catch here. If there are no overdrafts in people’s bank accounts, then Wells Fargo can’t charge any overdraft fees, right? So apparently it has been standard practice at Wells Fargo, despite a whole ship-load of computer software designed to prevent it, to “accidentally” let a whole bunch of these so-called “overdrafts” just happen. Oops.

“But Jane,” you might say, “that’s illegal and Wells Fargo has already been sued and forced to pay back over two million dollars to the customers that it ripped off by using this fraudulent practice. Wells Fargo KNOWS that this business practice is illegal. They have already been told by a federal court to cease and desist.”

Yeah, well. Tell that to the robo-dialers who are now hounding my friend night and day.

And why else would Wells Fargo make a “shadow line of credit” loan to my friend, thus giving their own money away? Nothing else makes sense.

PS: Wanna know more about the above-mentioned lawsuit against Wells Fargo? Wanna know just exactly how low this banking operation is willing to stoop to get its greedy hands on your money? Here’s the 411 regarding California class-action lawsuit No. C 07-05923 WHA, Gutierrez vs. Wells Fargo, August 2010: http://www.bank-overdraft.com/pdf/20100810-wells-fargo-finding.pdf

And just in case you don’t have time to read the whole thing, here are a few choice quotes from the judge’s orders in this matter:

“THE SHADOW LINE: The last step in the three-step plan was executed in May 2002. Wells Fargo implemented a practice involving a secret bank program called ‘the shadow line.’ Before, the bank declined debit-card purchases when the account’s available balance was insufficient to cover the purchase amount. After, the bank authorized transactions into overdrafts, but did so with no warning that an overdraft was in progress.

“Specifically, this was done without any notification to the customer standing at the checkout stand that the charge would be an overdraft and result in an overdraft fee. Thus, a customer purchasing a two-dollar coffee would unwittingly incur a $30-plus overdraft fee. (This very scenario happened to plaintiff Walker.)

“Internally, Wells Fargo called this its ‘shadow line,’ as in shadow ‘line of credit.’ The amount of the credit ceiling per customer was and still is kept secret. Again, customers were not even alerted when shadow-line extensions were made to them — until it was too late and many overdraft fees were racked up.

“In this program, the bank correctly expected that it would make more money in overdraft fees than it would ever lose due to ‘uncollectibles’ (i.e., overdrafts that were never paid back).

“Bad Faith and the Shadow Line: The third initiative was ‘overdraft via POS’ — the extension of the shadow line to debit-card purchases in May 2002. As a result of this change, Wells Fargo began authorizing debit-card purchases even though the account was already overspent.

“Before, if an account holder had insufficient available funds to cover a debit-card purchase, the bank would decline the transaction, thereby protecting the customer from further unintended overdrafts. After, the bank authorized the transaction without informing anyone that an overdraft was in progress. Profiteering was the sole motive behind this revenue initiative.”

PPS: If something like this has happened to you too, here’s a link to an application that you can fill out in order to become part of a class-action lawsuit against Wells Fargo yourself: http://www.bank-overdraft.com/contact.htm

And Wells Fargo isn’t the only bank that is doing this either. Apparently, many more national bank chains are also happily cleaning out their customers’ accounts. That’s bank robbery! That’s pathetic.

How come Republicans are going to such extreme lengths to bust our unions but are not laying a finger on their friends in the banks?

PPPS: When my friend went in to Wells Fargo today and asked a bank officer about all the many fees that it is now charging her, she was told, “These new fee charges are different from the ones in the lawsuit.” And what big difference is that? Apparently these new fees are being called “overdraft protection” fees instead of just fees at the point-of-service. Yeah, but the result is the same –Wells Fargo is still raking in hundreds of dollars in completely unreasonable fee charges, just from this one account.

If Wells Fargo is charging hundreds of dollars in unreasonable “overdraft fees” to just one of its customers, imagine how much money it is raking in from all the rest of its victims/customers!


From AlterNet: Awesome: Wisconsin Firefighters Shut Down Bank That Funded Walker: Everybody knows the GOP’s biggest weakness is money, so why not hit ’em in the sweet spot? That’s what many amazing Wisconsin firefighters did yesterday when they collectively began withdrawing their funds from Madison’s M&I Bank — whose executives and board members were among the highest donors to Governor Scott Walker’s campaign.

Heeding a call by Firefighters Local 311 President Joe Conway to ‘Move your money,’ union members withdrew over $100,000 from the bank, with some reports stating that number is as high as $192,000. Either way, it was a hefty enough chunk of change that M&I shut its doors and closed for the day at 3PM….http://www.alternet.org/newsandviews/article/515607/awesome%3A_wisconsin_firefighters_shut_down_bank_that_funded_walker/

Jane Stillwater: Wells Fargo has already been sued and forced to pay back over two million dollars to the customers that it ripped off by using fraudulent practice.


  1. I’ve known a few people who got caught up in overdraft fees, effectively shutting their accounts down. They were then placed on a check casher list that sounds a bad credit alarm for any unpaid debts. This meant that even switching banks didn’t necessarily give them the power to use their credit cards. It was a long process of battling with collection agencies before their names were cleared. These minor overdrafts, which the banks are too polite to explain, ruins both credit and consumer reputation.

  2. Jane thanks muchly for the links. I can use them and am on my way now. Wells Fargo also runs a little game I like to call “charging fees for no reason in order to plant your ass in a chair” while I was with them I noticed they would periodically charge meaningless fees which I would have to go into the bank to dispute. Of course they were more than happy to reverse their fee mistakes but the price was sitting through grueling sales pitches fir all their other products.

    The biggest problem is that ALL banks do this and moving banks is a pain in the ass. Too bad America has also made using cash a pain in the ass. But I would rather an all cash pain that I can control at this point I think.

  3. You, and/or your “friend” are irresponsible dotes who refuse to accept they got burned by their own negligence. Your “friend” probably signed a 2 yr contract with T-Mobile and gave them a “credit card” which was probably the bank checking card, as I do this all the time. Then your “friend” cancelled their t-mobil account prior to the 2 years ending. This caused a early termination fee to be processed. Since “your friend” didn’t pay t-mobile they simple withdrew it from the card on file, something that’s in their contract agreement which was accepted by “your friend”. Wells fargo saw the charge as a “credit card” charge and thus allowed the transaction to be processed, because it wasn’t processed as a debit the automated system didn’t know you had no money.. I mean.. your friend had no money. Thats when the over draft protection kicks in. Not to protect you, but to protect people you’re paying. If not you’d be in collections with T-Mobil and Wells Fargo.. I chalk this up to another irresponsible American trying to blame the banks for their mistakes. Kind of like a dummy who makes $100.00 a month signing on for a $99.00 mortgage.. A little unrealistic at best. .. Then they blame the banks for letting them take the loan.. No personal responsibility..

  4. This is for you Darren. You sound as if you work for the banks, in which case you should take your head and pull it out of the hole between your butt cheeks. I don’t care what people sign. Most companies make the GD contracts so difficult to understand that most lawyers have to look up some of the crap in them. Most common people who work hard don’t have time to sit around and look for loopholes in the system like you and the rest of your raping monkeys in suits. I for one am tired of these ridiculous fees, if you want my money work for it like the rest of us.

  5. Actually theres nothing in a t-mobile or most any other contract that give them the right to make a withdraw that has not been agreed upon, so yes go after both t-mobile and wells fargo , remeber if they give money to someone who is not authorized to withdraw money for a predetermined amount on a set date then they will fix it.

  6. Wells Fargo did the same to me November 3rd and I’m contacting attorneys night and day. I had been trying to fund my account and they allowed, without my consent, and knowing I did not have enough funds for that transaction, for a cash lending company to withdraw funds from my checking account than slapped me with a $35 overdraft fee.

  7. The current practice of wellsfargo is to charge your account for a transaction when you purchase something via ATM/Debit card and within 24 hours credit it back to your account. When logging into your account it shows your “available balance” as having the funds available. In a few days if you use any funds that we’re debited back–you are accessed a $35 fee for every transaction even when you account has not shown to have ever been in the negative. In otherwords if your account is shown to have $3000 in it and you transfer $1000 to another account at the same bank–you could be assessed hundreds of dollars a few days later; even if your account never goes into the red. These guys are thieves and again the attorney general’s office has no interest in protecting the public.

  8. Someone has done fraud on my wells Fargo Bank Account. Wells Fargo Bank has not answered anything I have asked them to on regards to my account. I canceled my Wells Fargo on 12/19/11 because they said I needed a co-signer in order for me to get a student loan but the interest fees were too much so I decided Wells Fargo was not the place I wanted to receive my Student Loan. When I canceled they gave me all the money back I had put into my account except for the dollar I told them to give to charity. It was not until a month later after I canceled my Wells Fargo account I found out someone has done fraud on my account. On Dec. 16th 2011 I walked into Wells Fargo and gave them $200 Cash out of (my own Pockets). They have in their system that someone inside of Branch did an Online Transfer of $200 from a Credit Card to my account which is in my name consequently that puts me in a situation to pay the money back. I tried speaking with a store manager to get the problem resolved but she told me they will not look at the camera to prove I walked in and gave them money and never did an online transfer unless I speak with a lawyer but right now I cannot afford a lawyer until I receive payments and when I do; I plan to get this problem resolved. She seemed to be on the defensive side but I explained to her numerous times that’s it is not my intentions to get any fired in their Branch but my goal is to get this problem solved so that my credit isn’t in jeopardy.

  9. I am a former banker for Wells Fargo Bank, I am on a workman comp injury since August 12, 2009 for trying to do what was right for the customers and myself. I was retaliated against and my personnal file was altered from a excellent sales & service to a bad employee. Employees are scaried to lose there jobs and need help on a better work environment. I go to court on May 3, 2012 in Long Beach to fight back for all the unethical practices they caused in my life.My customers in everyone of the markets I worked were taken advantage of as myself. I been in the banking industry since I was 17 years old. Took it as a ROP student before exiting out of high school. I worked for several different banks across the state of california and all banks that I have worked for are doing the same thing. I wrote to the president of the United states and no answer and all the insurance companies I payed into have denied me to get help while I be vebally assulted on not allowing to do what is right for the customers of the vision & vales of the bank teaches bankers in banker school trainning..The world is corrupt and we need justice to be served and FIGHT BACK…619-750-6595call me for my voice 2 be heard Global to let people know whats really going on..

  10. banks are for profit and if people actually read the papers you sign when you open an account you might not open one its all in the papers….i work for wells fargo and last month payed sevemty bucks in overdraft fees…it was my mistake and i owned up to it…

  11. I’m a victim. I have a joint account with my son with Wells Fargo. There was an unauthorized ACH transaction put through on the account in the amount of 2083.00. When we noticed this we contacted Wells Fargo customer service as stated in their online securities agreement and advise them that the transaction was not authorized. We were advised that they would notate the account and would refund us any fees. We also contacted the merchant that put through the unauthorized charge and put in a claim with their office. Needless to say the Wells Fargo representative did not notate the file and the charge was put through then reversed due to the fact that the funds were not available this went back to the merchant whose system automatically resend any declined ACH charges so it went back to Wells Fargo who again declined it and it went back to the Merchant whose system automatically sent it back to Wells Fargo a third time and this time Wells Fargo paid the charge but the amount of the money was not in the account so it pull the money from other accounts that were used for overdraft protection but still there wasn’t enough money to cover the unauthorized charge leaving our accounts either zero balance or a negative balance. Please also note that each time this transaction went through the Wells Fargo account we contacted both the merchant and Wells Fargo advising them that this was an unauthorized payment. Needless to say Wells Fargo did not follow their securities agreement in which they were supposed to open up the claim and to investigate I had to beg them to open up a claim to investigate this whole thing they kept telling us to go back to the merchant I advised them that I had but I still wanted them to open up A claim. their agreement does not state that I am supposed to go to the merchant their agreement states That I am to contact the customer service and that a claim would be opened up and within 10 business days they should contact me with a resolution. At this point. Wells Fargo is not willing to reimburse us any of the money taken or the overdraft protection or the Return to sender or The insufficient fees. This just does not seem fair. If I advise my bank that I didn’t authorize a payment shouldn’t they listen to me? I’m the customer when I call in I have to be verified before they speak to me. That is for my protection. But if I call and verbally tell them I didn’t authorize a payment shouldn’t they still protect me!!’ And not allow the charge!!!!!! Please some one help. What can I do. It almost Christmas and I can’t pay bills. I can’t buy food and I can’t buy presents. 

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