Wells Fargo Overdraft fees, overdraft protection, San Francisco California

If you still honored that time-tested tradition, you wouldn't be in this mess. There is no computer in the world that can overdraft your account. Only you can and you did. It's true that overdraft fees make up a good chunk of the bank's revenue but it isn't from 25% of their account holders. No, it's much less than that. It is testimony to the good old practice of keeping a check register with your written transactions that keeps the vast majority of account holders free from overdraft fees and allows them to keep more of their money.

If you really desire to harken baclk to the good old days, you'll rid yourself of that pesky thing called a debit card - use it to take cash out of the ATM and stick to cash and checks only. It's tough to manipulate transactions when few go through.

The bank didn't do this to you and neither did a computer. You did this to yourself and the sooner you realize this, the sooner you can stop incurring these fees. Best of luck to you.

Jim, my friend your passion regarding debit card usage has always been well taken. But here's the precise reason why I've never really considered this a viable option for many consumers.

Even if they do heed your advice and TRY to rid themselves of debit cards to eliminate fees, guess what, it's not always possible and no fault of their own. The victims? Those who have unfortunately lost their jobs. To further deepen their misery, here come the vulture banks in for more blood. The following blurb from one of many news articles regarding the NEWEST TREND in RIPOFFS.

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The Associate Press says that 30 states have cut deals with bailed out banks like JP Morgan Chase, Citigroup, and Bank of America to distribute unemployment benefits on debit cards instead of paper checks. The catch? All of these programs have fees - and in some states the cards are mandatory.
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Nothing ceases to amaze me with these guys anymore.

Jim, first of all, let me say that you are wrong, and Environemtalist27 has hit the nail on the head.
Secondly, allow me to introduce myself. My name is Paul, and I'm a computer programmer. My trade is to write programs for QA analysis automation in litigation support. In other words, I write programs that verify that copied court documents match their originals.
I currently bank with Wachovia, and have had no issues until they completed the merge with Wells Fargo. I used to bank with WF, and this was the very reason I left, and is also the very reason I'm about to leave Wachovia. Here is a more detailed explanation of what Environemtalist27 is saying...
Let's say you have $50 in your account. You go out and in a single day, here is the order in which you conduct transactions:
$8 hamburger meal
$2 ice cream
$25 gas
$5 car wash
Now, those purchases total $40, which would not go over the $50 you have in your account. Now let's say while you're out, you see an awesome sale on a cordless drill for $50, so you borrow $50 from a friend, swing by the bank, put in the $50, and then go purchase the drill on your debit card. Now, in your mind, and in real-time, here is the order of transactions:
-$8 hamburger meal
-$2 ice cream
-$25 gas
-$5 car wash
+$50 deposit
-$50 drill
Which still leaves you with $10 in your account. However, WF won't make any money that way, so your transaction timeline actually gets altered so that they appear in this order:
-$50 drill
-$25 gas
-$8 hamburger meal
-$5 car wash
-$2 ice cream
+$50 deposit
Where does that leave you? The drill uses up the original $50 you had, then you get overdrafted for the gas, hamburger, car wash, & ice cream, all at $35 a pop, because your deposit doesn't make it in until last. So yes, a computer CAN and DOES overdraft you. In fact, it just happened to me, and I'm joining the class-action lawsuit against them.
WF recently got their hand slapped for manipulating the order in which checks are presented (again, largest to smallest), so that the same thing happens. Usually this happens when someone might look at their account and say "oh crap, I'm going to overdraft on that charge", but instead of an overdraft, they get 4.
Sources:
http://www.hbsslaw.com/wfc
http://www.law.com/jsp/article.jsp?id=1202429119415
http://www.yelp.com/topic/san-francisco-class-action-lawsuit-gutierrez-v-wells-fargo

And here is the tail end of my bank statement. Note that there are TWO purchases where the balance was negative (in parenthesis), yet there are THREE overdraft charges. Why? I was told it was because the $9.55 charge was 'on hold' whilst the $11.98 charge was made, and "although you had the money in the account for the $11.98, it overdrafted because the $9.55 was on hold" (exact words).
03/17/2009 Other OVERDRAFT/UNAVAILABLE FUNDS FEE $35.00

($116.07)
03/17/2009 Purchase PURCHASE CIRCLE K 2706732 8822 03/16 $7.54 ($81.07)
03/16/2009 Other OVERDRAFT/UNAVAILABLE FUNDS FEE $70.00 ($73.53)
03/16/2009 Purchase PURCHASE IRONDALE BP 3440 03/13 $9.55 ($3.53)
03/16/2009 Other AUTOMATED DEBIT PAYPAL INST XFER $11.98 $6.02
03/16/2009 Purchase PURCHASE IRONDALE BP 3440 03/14 $23.07 $18.00

Yes, I knew I was going to overdraft, but my point is simply that the re-organization of the order items are presented ensures that you WILL be blasted with the maximum amount of charges.

You use an example that really does not apply.

"...Those who have unfortunately lost their jobs..."
So does this give them the right to spend more than they have in their account? If so please inform me of the law that allows this, but from where I come from that is known as fraud and/or theft. Just try that with cash. After all what would happen if you paid for a $10 shirt with a $5 bill and walk out of the store?

Yes, you will counter with the "but this is how unemployment is given out". Okay that may be true. But, and here is the big point, Unemployement Offices do not force the recipient to spend more than they have in the account. That is done in most cases by the recipient(just as with a regular account) NOT keeping track of their spending. Again as bad as their situation is, what gives them the right to spend more than they have?

Specifically, this line:

"Yes, I knew I was going to overdraft, but my point is simply that the re-organization of the order items are presented ensures that you WILL be blasted with the maximum amount of charges."

Posting the daily transactions from largest to smallest does NOT ensure overdraft fees. If you stay within your account balance then the order that they are processed doesn't matter. If I have $1,000 dollars and $975 in debits and checks, there is no possible way for the bank's computer to force me to overdraft.

Let me ask... how can the bank process your transactions in order they were made when they don't receive them that way? Your transactions go from the merchant's bank to the ACH and then the transactions are put in batches and shipped to the various banks. Your bank receives two or three batches of transactions throughout the day. Your bank takes all of that day's transactions and posts them from largest to smallest and once again that does not generate fees if you stay within your account balance.

Dear Environemtalist27,

I have had the same problem. Today I am online searching to see if anyone else has had this problem because I think I'm going crazy and yet I know I'm right. I was so thankful to see your report.

Last week I had six dollars in my account with nothing coming in. I spent four for lunch. The next day I dropped in 26.00 just to spend if I wanted. All week my account was fine. Never did it show that I was overdrawn and accorrding to my accounting I was never overdrawn. By Friday am I had 20.89 as I knew I should. At 3:20 I had two bounced check fees. What happened supposedly was that I bounced that four dollar lunch expense on Tuesday and the fees didn't show up until Friday afternoon but one of the fees showed that it came in on Thursday, which it had not. During the week all the purchases kept re-arranging themselves. This only happens when I am low, just as you stated. I believe there is some formula that knows when I am low and re-arranges everything so I do bounce a check. I keep telling the Bank Manager that I want true accounting and whatever this is - it's not true accounting. Whatever comes in first needs to be paid as it comes in.

I am fed up with Wells Fargo and their games. I'm tired of the bank manager telling me that I just don't know how to balance my account. I have believed for a while that there was some formula in their system that knows what to do when I am low on my account - not overdrawn - but the funds are low, and re-arranges everything . I don't spend any money unless I have it. I have had this bounced fee situation going on for a while and it happens about every four months and only when I am low.

I have contacted the law firm below,

Sadler Law Firm
(((Redacted)))

I wanted to see if anyone has filed a class action lawsuit against Wells Fargo as I would like to join or get it started. Please have people contact this firm if they are interested.

CLICK here to see why Rip-off Report, as a matter of policy, deleted either a phone number, link or e-mail address from this Report.

Dear Enviornmetalist27 please see info below to join class action suit! Yippy!

Wells Fargo - Overdraft FeesDate Filed: October 3, 2008
Court: U.S. District Court
Location: Seattle
Ticker Symbol: WFC
Hagens Berman Sobol Shapiro filed a lawsuit against Wells Fargo (NYSE: WFC) claiming that the bank's systematic practice of re-sequencing electronic debit transactions results in excessive overdraft fees to customers living in Washington state.

The firm is also investigating this alleged practice in other states, and is very interested in talking with Wells Fargo customers in other states. If you feel that you've paid excessive NSF fees due to this practice, please e-mail the firm at info@hbsslaw.com.

According to the complaint, Wells Fargo practices running bank transactions from the highest to lowest dollar amount instead of posting the transaction according to the order received. This puts Wells Fargo customer accounts into a negative balance and artificially increases the number of overdraft fees the company can charge.

The lawsuit seeks to represent any Wells Fargo customer who currently incurred overdraft fees on electronic debit transactions, even when sufficient funds were available.

To join this suit you can click here or e-mail the firm at info@hbsslaw.com.

RECENT DEVELOPMENTS:
December 23, 2008 - Today we filed another lawsuit against Wells Fargo on behalf of residents in Minnesota and Texas. The lawsuit lists the same claims and allegations against Well Fargo regarding its overdraft fees and sequencing of electronic debit transactions.

If you've had a checking account and paid an overdraft fee anytime from Dec. 23, 2004 until present please join this suit or contact us at (206) 623-7292.

I went to the law firm's website and there is NO LISTING of this alleged lawsuit for the posting order. There is a lawsuit listed regarding 401(k) issues but not about the posting order.

I also looked on PACER for such a lawsuit in WA District Court and again, I could NOT FIND such a lawsuit listed.

Why is that? I suspect that it wasn't really filed (even a filing and withdrawal is listed on PACER.) Further, the posting order issued was RESOLVED by another District Court some years ago. The banks may post the transactions in ANY ORDER as long as the bank DISCLOSES how the posting order will be.

Kindly post the CASE NUMBER and the specific District Court that is allegedly going to adjudicate the posting order.

Fieroboom, not impressed you're a programmer. Sorry. The deal here is that you want the bank to process the transactions in the order you choose. Sorry - you don't get that option. That's in your account agreement, and when you take some time to life your head out of the code you're reading, you'll find I'm right - again. The bank has the right to process transactions in any order they wish.

I even got some of the notifications you reference regarding the lawsuit - so let's be clear. This bank was nailed on a lack of disclosure on the policies - not the actual policies itself. The policies are the policies and nobody on either side of the lawsuit argued that the bank's policies are abusive. If you do not like them - you can bank elsewhere. But before you do something that stupid, consider that all of the banks transact business the same way. What happened to you here would happen to you anywhere and everywhere.

In the end, the banks have the right to make as much of a profit on their foolish customers as they wish. For purposes of this discussion, anybody who deliberately overdraws their account is a fool. It's not a matter of taking responsibility; it's learning something from the foolish act. Don't overdraw your account and you won't be subject to any fees. You have that control - not the bank.

These kind of practices are currently in the works to be made illegal.

Right now the bank "rearranges" transactions because it assumes transactions of higher monatery value are more important (Car payments, energy bills, rent, etc) They want to do those first because they don't want an unfortunate series of events to cause your car to be repossesed, you get evicted, your power get turned off etc.

You can also have over draft protection turned off (Overdraft protection is what causes this) You simply need to ask.

Here is an example of what they don't want....
You have 50 dollars
You buy lunch for 10 dollars
You get gas for 20 dollars
You make a 40 dollar car payment
Your car payment bounces from insufficient funds
Your car gets repossesed
Your screwed

I had a similar experience happen with US Bank but mine was unique and as a result of them not helping to correct the issue I switched to Wells Fargo and have had 0 problems. Here is what happened to me....

I went to movies with buddy - 15 dollars
I ate dinner - 10 dollars
I went home the next day - 20 dollars
I had 70 dollars to start in my account

On Monday I saw 8 15 dollar transactions as "Pending" on my account along with dinner and trip home. I immediatly had my mom transfer in some money to help my account. With the way transactions were processed I was charged over 400 dollars in over draft fees.

So what happened?

The ticket booth attendant at the movie theater was on the phone with her mom while swiping my credit card and thought the transactions werent going through. I got my money reimbursed but what made me mad is if you subtracted overdraft fees I was overdrawn by under 5 cents.

The bank was only willing to cover half and the theater was willing to take no responsibility other than refunding me for the extra charges. (The 5 cents under was with the extra transactions added in)

I have been much more careful with my spending and make sure I do not use credit unless I absolutely have to. I have not had an issue since that incident.

I agree that it would probably be easiest for us sit down every night and balance the old check book while the wife cooks dinner and the kids play hop scotch on the front sidewalk, but then I remember I'm not living in the 1950's. Surely with today's technologies financial institutions can provide us consumers with a form of online account information that accurately reflects the status of our accounts (not just an approximation as most do now). And to not only offer and provide these features / services (i.e. Online Account Information) as a selling point for new consumers, knowing they are manipulated and serve no purpose when actually disputing a transaction ,should be considered fraudulent business practices.

It's just a simply bad idea to be in a chain bank.

Jim said to use good old cash and keep receipts... but the bank doesn't follow their own practices...

In example.

A few months ago I went out to eat for breakfast. It was the first Saturday of the month and I had cash on hand and sufficient funds in the bank. So, I put breakfast on the card and spend some cash. I deposit money into the atm. Cash only mind you.

I get a receipt.

Well, I deposited it after 12pm on Saturday and Wells Fargo does not honor cash. To my unknowing, it gave me credit the following Wednesday....

Keeping a balance book, I would think I would've had funds through Wednesday; in matter of fact I didn't. I was extensively negative. If I had deposited a check I would have at least $100 dollars in funds available. Total used was under $25 but over draft amounted to over $105.

I have tons of reciepts in my purse, non which say cash is worth less than checks, and they can choose to honor whichever they preference. I have had the joyous experience of walking into a bank and trying to discuss the fees with a personal banker (because it now costs to discuss it over the phone) and be pinned as a blabbing rude idiot by the associate next to the one I'm talking to.

A few rules to remember with this bank.

Deposit checks before 4pm.
This doesn't mean you will see any of your check, but it has a better chance.

The bank rules transfers before 7pm will show; however this is not the case, because I have had to argue over it.

Over Draft protection does not work because the bank won't allow the transfer until the following buisness day when your $5 overdraft becomes $40. That Overdraft protection also has an extra fee for working... so you're paying $60 instead of $5.

I would love the bank to loose the California Over Draft suite; however I know they will win. They do online management through Quicken who is not listed on the case thus it is a crushed dream to see any % back of what I have lost.

Moral: bank with a credit union.

You are wrong! In your scenario, your deposit would have been the first thing that posted to your account since deposits are posted first for most banks, including WF. So here's the CORRECT order in which your transactions would have posted:
+$50 deposit
-$50 Drill
-$25 gas
-$8 meal
-$5 car wash
-$2 ice cream

The ONLY way your deposit would have posted after your purchases would be if you made the deposit after your bank's cut off time. Cut off time is normally after 4pm. In that case, your deposit would post AFTER your purchases and you would be assesed OD fees because you made purchases you didnt have to money to pay.

If you make purchases before you make your deposits you're playing with fire. If you dont want OD fees, first make your deposits then make your purchases, then have a check register and write down all deposits and purchases to make sure you're on the right track. It would be impossible to recieve OD fees if you do that. if you dont do that, then you're on the path to continue to pay the idiot fees. Sounds like you have been through this several times so you may have to educate yourself on how the system really works.

The funny thing is that some states will post items as they come in... This means i can go and make small unimportant purchases which will overdraw my account and this means that now people wont have enough money to pay my mortgage or car payment. They will then complain that the bank paid for the $50 drill and not their mortgage... I think one is just a little bit more important to most people than the other.

Either way, the bank is always the bad guy because this generation of people is used to blaming others for the things they do.

Two words - Debit Cards.

There are many who will remind the complaining consumers that things are not like they used to be in the old days with checks. The 'float' no longer exists. You used to be able to write a check on Monday and beat the check to the bank with a deposit on Tuesday or Wednesday. We are told those days are gone. This behavior cannot and should not be attempted with Debit Card purchases because you'll get burned every time. With the advent of the Debit Card, and since everything is going electronic these days, such as Check21, this means written checks are a thing of the past and will be eventually be extinct.

Now here's the key. Debit Card purchases are GUARANTEED no matter what and NEVER returned. And many banks are beginning to simply pay many forms of electronic transactions as well, such as ACH. This means NO MORE RISK to those important items like mortgage payments getting returned. Which means the ARGUMENT and LOGIC for posting items in descending order by amount is no longer valid.

So can or will the banks go back to posting items in the order they're received, like they did in the old days? Don't hold your breath. But do hold on to your wallet.

Fieroboom did deposited cash into his account on the same day. However the bank withheld the deposit and allowed it to post the day after the purchases showed, creating a huge fine of overdraft fees. The bank intentionally waited a business day for posting the deposit to his account. That's a point everyone is skipping.

Wells Fargo should honor cash and post it the same day since putting "play money" into an account is a FEDERAL OFFENSE. Having a time frame in which is posts becomes as much of scam as a "legitimate" policy.

Alike my problem before, if I deposit $300 in cash, there should be no difference when it posts alike a check. $300 in cash is withheld until a Wednesday; where as a check for $300 would have minimally given $100 available immediately.

If I had put in a bad check, both myself and the issuer would be hit with a $50 dollar fee.

So holding cash deposits off does put a pin with rearranging purchases. Had the cash and purchases shown the same day, there would be no overdraft fees, and that's on the bank's policy. This topic does not honor playing roulette with a check and waiting a few business days to fund an account: it says deposit this day, show this day, that's it.

Of course, by all means, anyone claiming this practice is purely legitamate can take a $20 dollar bill from your wallet and run extensive test to claim if that $20 is a real piece of currency than a check you can write to yourself. Act like the bank and minimally provide yourself 48 hours to come up with a conclusion.

I have never been charged any overdraft fees from my bank...
I am not rich... I use my debit card all the time... my bank reorders transactions...
Come to think of it, I still wouldn't be charged a fee if my account were to drop to 10 cents!!!
You want in on the secret?

I use a transaction register and write down every single transaction that I conduct!!

Just in case hell happens to freeze over, and I do overdraft my account,
I have FREE overdraft protection linked to my savings account!!
I will never be charged a $35 idiot fee per transaction. Never.

Has it ever crossed your mind to pay with CASH instead of using a debit card?
there are people that say...

"I had X amount of cash on Friday, and was going to deposit it on Monday, but instead used my debit card knowing I'm gonna deposit the money. When I got my deposit slip my balance was
NEGATIVE!!! now I'm paying the bank hundreds in OD fees cause they reorder transactions...
RIPOFF!! DAMN COMPUTER ANALYZING MY SPENDING HABITS!! F**** BULL****!!!"

People still accept cash, believe it or not!!! You're not impressing anyone by buying
a newspaper with a debit card... If you have a small balance, and are not going to make it
to the bank until Monday, USE CASH!!!

...Unless of course, you love to hand your money to the bank...

Just my .02