A federal judge on Tuesday ordered Wells Fargo to pay California customers $203 million in restitution for claims that it had manipulated transactions to maximize the overdraft fees it charged.
Instead of processing transactions in the order in which they were received, Wells Fargo put through the largest to smallest, a judge in San Francisco found. In a stinging 90-page opinion, United States District Judge William Alsup wrote that the practice was unfair and deceptive.
“The bank’s dominant, indeed sole, motive was to maximize the number of overdrafts and squeeze as much as possible” out of customers who spent more than they had in their accounts, the judge wrote. The ruling comes after a two-week trial in the spring heard by the judge. More here.
Delicious news for all small business owners and entrepreneurs especially.
Excessive overdraft charges are a very big source of profits for the banks, though. Wells Fargo collected $1.8 billion in overdraft fees in California alone from 2005-2007. You can bet who paid. Hint: not the big people.