Wells Fargo Caught in Another Fraudulent Scandal Perpetrated Against Customers

Some power-mad and money-hungry financial empires just don't seem to learn their lesson, or they just don't care. Just last year, Wells Fargo was caught in a scandal where they were illegally charging customers for services they didn't ask for.

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Wells Fargo was fined close to $2 million when caught opening unauthorized new accounts for customers in order to reach their "sales goals". It wasn't a small group that was perpetuating this criminal behavior, as over 5,000 employees were doing it. It seem likely that this was known by the higher-ups as a common practice that was tolerated, if not promoted, in order to maximize profits. But when the scandal a came to light and Wells Fargo got caught, the curtain-call came down on all those who did the account opening as they were fired by the bank.

After the scandal, the CFO, John Shrewsberry, even told CNBC they were taking "aggressive" steps to "protect" the American people. Well, now Wells Fargo is up to more scheming to screw people over. They must really think people are stupid or have "goldfish" memory to just forget about what happened last year as they were rebuilding their public image and trust.

Instead of helping people, there Wells Fargo has an aggressive tactic to force customers to drop charges against the international bank. In the fine print of their contracts with opening a bank account, they have a clause on arbitration that forces customers to not go to court against the bank, but to go to a private arbitration hearing instead.

As such, plaintiffs against the bank are not able to engage in normal legal measures. Legal arguments become more difficult for customers with grievances against the bank. These arbitration hearing are more expensive than going to court. The procedures are drawn out and tiresome, with the outcome usually resulting in the customer dropping their charges against the bank rather than to continue with the bullshit private arbitration process.

Customers have been suing the bank for "debit card reordering", costing Americans millions in overdraft fees. Someone with $50 in their account who spends more than they have has to pay for the extra sum and a fee for the overdraft of their account. Say they spent $60, there is a $10 overdraft due, along with a fee. If you spend $5, then $20, then $60, you have one overdraft of $35. Well Fargo has been reordering the transactions from high to low, so that you are charged for the $60 overdraft of $10 first and it's fee, but then for each other transaction which makes 3 fees instead of one. This makes a lot of money in fees being charged when applied to millions of customers.

The courts have determined this practice to be deceitful and a national class-action lawsuit against 30 different banks brought an end to it for those banks years ago. They paid a total of $1.1 billion in restitution for the overdraft abuse. But Wells Fargo has been doing it anyways, and using the arbitration clause to get around letting their customers seek justice in courts. In California they were forced to pay $203 million to customers, but they are winning everywhere else as they continue to do it.

In the last 8 years, Wells Fargo only lost 7 of 48 arbitration cases for this fraudulent activity. Most cases end up being dropped because they cost too much to follow through on. Last year alone, the FDIC said Wells Fargo's overdraft fees increased by 16% from the previous year. This is more than even the largest bank in the US, the Bank of America, which reported a 6% increase.

Wells Fargo is evading legal remedies for their clients, and is apparently doing it in a very "legal" way as per the terms in their contract fine print. This is essentially perverting the legal process for customers to find justice. It seems that instead of helping the people if ever the bank screwed up, they made sure that people would have a harder time making the bank pay.

Even with a $2 million fine from last years scandal, the profits they make screwing people over must be more and make it worth it to engage in illegal activities. The same must be true with this overdraft fee scandal and fraud. A 16% increase in fees compared to the largest US bank speaks volumes.

The media says people are losing faith and trust in banks and the financial system. I wonder why... It's good news for crypto though.

_{Seattle City Council/flickr, CC BY 2.0}

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Thank you for your time and attention. Peace.

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References:

• Everyone’s favorite bank, Wells Fargo caught in another massive scandal
• Wall Street is making big bucks from overdraft fees – again
• Here's why Wells Fargo forces its customers into arbitration: It wins most of the time
• Customers challenge the way banks reorder debits in order to rack up overdraft fees
• Wells Fargo Fined $185 Million for Fraudulently Opening Accounts

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