NEWS ARTICLE
August 16, 2010
The Detroit News, "Hero judge bounces check fees"
A California judge is my new personal hero.
Not the wise and fair-minded U.S. District Judge Vaughn R. Walker, who overturned the state's odious gay marriage ban -- he's last week's hero. Now it's the wise and fair-minded -- and obviously infuriated -- U.S. District Judge William Alsup who on Tuesday ordered Wells Fargo & Co. to pay back $203 million in sleazy overdraft fees to bank customers.
The judge called the bank's manipulation of account balances to create extra overdraft fees "gouging and profiteering." His decision found the bank's policy existed only to "squeeze as much as possible" from its customers. I couldn't have said it better myself. But that's only because my editor won't let me use the phrase "#$@&! &%@*! pond-scum."
Obscured policy
But I can use the phrase "lying putrid weasels," which applies to any banker defending the widespread, grubby practices most banks apply to clearing checks and handling overdrafts.
In the case of Wells Fargo, the bank introduced and obscured a policy of clearing all checks, debits and debit-card purchases in the order of largest amount to smallest, rather than in chronological order or by check number. Most banks do this, "to better serve the customer," although any time I've asked them to prove it, they haven't produced a shred of research to back up their claims.
What can be proven -- and was in California -- is that clearing the largest transactions first is guaranteed to create more $35 insufficient funds charges if an account has several overdrafts in one day.
Read the full article on the Detroit News site.
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