Wells Fargo Overdraft fees -- a new scheme? Santa Monica California

I hate to repeat another report but I have been victimized by WF (btw I have been a customer of their for 25 years) by the same overdraft fees which are becomim a big issue provided how funds are withdrawn and credited nowdays. The issue is not "why you did not have enough money in your account to cover all and then some" but how the fees are applied on accounts that are technically not overdrawn but theoritically by WF rules they are. Of course we can all keep a 100,000 dollar extra balance in our checking account for those "special" moments but all of you know that if there is this kind of spare cash it would be locked up in some CD or interest bearing account. Checking accounts are for running expenses and paying bills and even the most careful check balancing process will result in these "wonderful" $34 fees (by the way when complaining 80% of the time they are waived by the graceful WF employees that throw some pitty on you...)

The problem is created when payments must be made and checks arrive "while WF is processing your funds".

I run a small business that gets 90% of its funds from credit cards and therefore depends on those funds to pay day to day bills. Before the new regulations that allow banks to deduct funds from one's account simply with an image of a check, this was not an issue since cashing checks was typically taking 2-3 days to complete from the time they were deposited. Now these same checks clear the day of the deposit. So a check deposited in the morning against funds available at the end of the day is considered an overdraft. I accept that as part of the system but here is where the problem starts based on my experience and fees charged:

Lets assume that you have five outstanding checks, four for 1$ and one for $100. Your account at the "beginning of the day" has $100. The checks come in sequence (1,1,1,1,100). According to WF you are overdrawn five times for 5 times $34, instead of once for the 100 which by all standards should be turned back for insufficient funds and be done with one charge for that... Contrary to the common sense approach WF will charge you $170 to cash $105 for the convenience of not bouncing the one check, which they will do on a separate occassion if you do not cover your checks the following day and charge you an additional $30 for insufficient funds.

The last example is typical in about 5-6 incidents this year in which all checks were covered by being off by a few dollars due to miscalculations. In one case we were unaware of the situation thus having two checks returned as mentioned above and only because our account was short due to $340 worth of overdraft fees (for 10 checks) on the following day! Our total cost after some waived fees was over $1000 simply because we do write a lot of checks for our business, payroll, and have some consistent automatic debits that are unavoidable or cannot wait.

In general I do not think that this is a "rules" issue but rather than an attempt to generate as many fees as possible particularly since most people will not contest them since they do appear embarassing. Don't you love standing at the window talking to a teller for all the other customers to share, you low balance responsible for the overdraft... In some cases your bank manager or personal banking office will waive those fees but first of all it is embarassing having to beg for their removal, and secondly they get reprimanded for waiving too many of these.

There is definitely a consistent scheme of banks and credit cards to pile on fees as the economy spirals downward. The disturbing part is that they are all doing it so the concept of moving to another bank is practically "cutting your nose to spite your face"... Furthermore banks are writing consumer protection laws (see new bankruptcy law by Chase...) without anybody scrutinizing them. Note the number of articles on this web site for the last two years... I would like a rebutal on this one.


Santa Monica, California
U.S.A.

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