A lawsuit in California concerning Wells Fargo and its practices concerning overdraft fees finished recently. Wells Fargo was ruled to have unfairly charged individuals with overdraft fees, and Judge William Alsup ordered the financial institution to repay them. The judge held that the bank had purposely structured their overdraft policies to extricate profit from their customers. Numerous contend that an individual is better off getting a money advance than relying on overdraft protection.
Wells Fargo ordered by judge to pay $ 230 million
Wells Fargo was ordered by Federal Judge William Alsup to pay customers back for overdraft fees to the tune of $ 230 million, according to Forbes. Depending on the amount of the overdraft, a single overdraft fee can carry an APR far higher than a cash advance. One of the practices in question is clearing the largest charges first, which can exacerbate an overdraft of only a couple of dollars, resulting in a charge of $ 35 per occurrence.
Wells Fargo took a lot to the bank
Wells Fargo did not make consumers aware they could opt out of overdraft protection or decline transactions that would put them in overdraft. The judge also highlighted documents showing that the financial institution put covert lines of credit in place for checking accounts, making it hard for transactions to not clear and thus guaranteeing that an overdraft fee would result. The judge also cited that internal communications from Wells Fargo proved the motive was explicitly to profit from overdraft fees. The financial institution generated $ 1.4 billion from 2005 to 2007 in California alone. An individual is almost better off if they get a personal bank loan to float them between salaries.
Overhaul of Overdraft
There are new rules in place concerning overdraft practices, and other credit from banks such as credit cards. The Federal Reserve, as outlined by CNN Cash, has instituted a rule that mandates banks notify clients of the option to not take overdraft protection. Banks make about $ 38 billion each and every year from overdraft fee income.
Additional reading at these sites
forbes.com/davidrandall/2010/08/11/how-wells-fargo-cheated-its-customers/?boxes=Homepagechannels
money.cnn.com/2010/05/21/news/economy/consumer_protection/index.htm
No comments:
Post a Comment