Wells Fargo Fined $203M for Gouging

'Profiteering' bank ordered to repay overdraft fees
By Rob Quinn,  Newser Staff
Posted Aug 12, 2010 5:39 AM CDT
Wells Fargo has been ordered to repay overdraft fees from a 4-year period.   (AP Photo/Seth Perlman)

(Newser) – Wells Fargo is guilty of gouging and profiteering and needs to return $203 million in overdraft fees to customers, a San Francisco judge ruled yesterday. The bank's practice of processing transactions from the largest to the smallest instead of in the order in which they occurred is clearly designed to maximize the number of overdrafts and "squeeze as much as possible" out of customers, the judge wrote in his sternly worded decision.

The judge ordered the bank to change its "unfair and deceptive" practices, which in some cases caused customers to be charged 10 $35 overdraft fees for going just a few dollars over the limit, the AP reports. Wells Fargo says it is disappointed by the decision and plans to appeal. If the decision stands, it could be just the tip of a very costly iceberg for Wells Fargo, the San Francisco Chronicle notes. The $203M million only applies to California customers, and a similar class-action suit representing customers in other states will go to trial next year.

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