Wells Fargo Is Trying to Bury Another Massive ScandalBy DAVID DAYEN;illustrated by LIA KANTROWITZ
Jul 17 2017, 4:27pm
The bank became notorious last year for creating fake accounts on behalf of customers. Now it's trying to kill a class-action lawsuit over shady debit card fees.Wells Fargo became a poster child for corporations that abuse their own customers last year when it got fined for ginning up roughly 2 million (maybe even more) fake accounts to meet high sales goals. The bank has since tried to block customer lawsuits over that misconduct, using fine print buried in contracts known as the forced arbitration clauses, which force customers to go not before judges but a secretive non-judicial process to get relief.
It turns out Wells Fargo has a long history of using arbitration to evade legal scrutiny. In fact, for the past six years, Wells has tried to use arbitration to block a class-action suit that every other major bank in America long ago settled. This has not only delayed restitution for regular customers, but revealed exactly why Elizabeth Warren's brainchild Consumer Financial Protection Bureau (CFPB) moved to eliminate class-action bans through arbitration clauses earlier this month: It hands big banks a license to steal with impunity.
The case centers on something called debit card reordering. Let's say you have $100 in your bank account, and you make three purchases, costing $20, $30, and $110. Under Wells Fargo account guidelines, the bank can charge you a $35 overdraft fee for taking out more than you have in your account. But by reordering the transactions from highest to lowest, putting the $110 charge first, the bank could charge three separate overdraft fees, one for each attempt to draw insufficient funds. Simply by altering the transaction order, Wells Fargo could make an additional $70.
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https://www.vice.com/en_us/article/nev95x/wells-fargo-is-trying-to-bury-another-massive-scandal