San Francisco Chronicle, "Wells Fargo faces larger suit on overdraft fees"
A San Francisco judge's scathing ruling ordering Wells Fargo to pay its customers $203 million for manipulating debit transactions to maximize overdraft fees might be just the start of troubles for the bank. U.S. District Judge William Alsup's 90-page opinion Tuesday described Wells Fargo's motive as profiteering and said the San Francisco-based bank's goal was to "maximize the number of overdrafts and squeeze as much as possible" out of customers.
But the hefty tab represents only what Wells owes its California customers. That figure is far smaller than the potential bill from a separate suit in which Wells' clients in other states have accused the bank of the same unfair practices. That case, consolidated in federal court in Miami, includes similar claims against 30 other lending institutions, including Bank of America, Citibank, Chase, Union Bank and U.S. Bank. The crux of the claims is that the banks processed debit transactions from the largest to the smallest, instead of the order in which they occurred, depleting accounts faster and boosting the number of overdrafts, which cost as much as $35 per transaction. Wells representatives declined to forecast what the ruling might mean in the Florida matter.
Richard Heimann, lead attorney for the Wells Fargo customers in California, also is representing plaintiffs in the class-action lawsuit in Florida. Heimann said Alsup's order could affect the outcome of that case, even though the judge there is not legally bound to follow it. "The decision may very well be influential because it was based on a well-regarded justice's review of a full evidentiary record," Heimann said. "There's no doubt that the defendants' lawyers had been waiting to see the outcome of (the California) case and will be concerned about what it will portend for the case in Florida." Heimann noted that representatives from several banks named in the Florida suit sat in on the California court proceedings.
Read the full article on the SF Gate website.
