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California Judge Issues Harsh Judgment against Wells Fargo


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5/23/2013
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A federal judge in San Francisco issued a ruling ordering Wells Fargo to reimburse customers after finding that the business practices employed by the company were misleading and unlawful.  The judgment award totals $203 million, which will be distributed to customers who were subject to the manipulation of debit-card transactions.  The issue arose when Wells Fargo’s transaction statements listed the amounts in descending order, that is, with the highest dollar transaction listed first and the lowest at the bottom of the transaction statement.  This practice misled customers who presumed that the transactions were listed in the order they occurred, leading them to overdraw their accounts based on faulty perceptions of how much was remaining in their debit accounts.  The U.S. District Judge William Alsup ruled that the business practice was intentionally deceptive in an attempt to collect overdraft fees from customers.  The company is liable for fraud under California’s Unfair Competition Law.  A spokesperson for Wells Fargo stated that they disagree with the ruling and plan to appeal.



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