SAN FRANCISCO–Wells Fargo’s customers have a new complaint. Or make that former customers.
Numerous customers of the bank have been informed by Wells Fargo it is closing their accounts, for reasons it often says are “confidential.” But even after the accounts are closed, they are not really closed and continue to rack up big fees, according to numerous accounts shared with the New York Times.
For example, one former customer who had the 13 accounts of his roofing company closed by the bank, Xavier Einaudi, reported that for several weeks after the effective date the bank said the accounts were closed, it actually kept some of them active, with auto-payments made to a number of vendors. But the zero balance meant a $35 overdraft fee with each payment made.
When Einaudi contacted his local branch and called the customer service line, he told the New York Times, “They told me, ‘The accounts are closed out — we cannot do anything.’”
Within a few months he owed Wells Fargo $1,500.
Multiple Complaints
The New York Times reported it spoke with current and former bank employees who said Einaudi and others were charged because of the way Wells Fargo’s computer system handles closed accounts: An account the customer believes to be closed can stay open if it has a balance, even one below zero. And each time a transaction is processed for an overdrawn account, Wells Fargo hits the former customer with a fee.
“The problem has gone unaddressed by the bank despite complaints from customers and employees, including one in the bank’s debt-collection department who grew concerned after taking in an estimated $100,000 in overdraft fees over eight months,” the Times reported. “It is not clear how many people have been affected, but aggrieved customers have brought complaints to the Consumer Financial Protection Bureau, griped on the discussion sites Reddit and Quora and voiced their displeasure through the ‘Community’ section of Wells Fargo’s website — a public comment feature that is now disabled.”
A spokesperson for the bank told the New York Times he could not comment on specific accounts for privacy reasons, but said the bank reviews accounts to protect customers and was “committed to doing so in ways that minimize the risk and impact to our customers.”
Wells Fargo’s Letter
Wells Fargo, which has paid more than $15 billion in fines and settlements for a number of scandals, said when it closes an account, it usually informs customers in a letter that lists two important dates. The first is the date deposits can no longer be accepted. The second, which is two weeks after the first, is the date after which no more withdrawals will be honored and the account will be closed, the Times reported.
“Any payments you make to others that are automatically withdrawn from your accounts will be discontinued after your accounts are closed,” the letter says. The New York Times reviewed four such letters.
What 2 Ex-Employees Said
But two current and two former employees told the Times Wells Fargo had set up its computer system to keep such accounts open if they have a balance — whether positive or negative — even after the closing date.
One current Wells Fargo employee who spoke on the condition of anonymity told the Times two workers in a debt-collection office complained about the problem through the bank’s anonymous ethics hotline late last year. “One, a member of a 40-person office, had collected an estimated $100,000 as a result of the practice, making up 5% of the employee’s total collections over an eight-month period,” the Times said.
Another Wells Fargo customer, Anna Tchorbadjiev, told the Times she has been receiving calls from the bank about debits and overdraft penalties it says she owes since her checking account was closed in February.
Money in a Brown Bag
According to the Times, Tchorbadjiev, 23, said she learned her account had been closed when she visited a Wells Fargo branch to withdraw some cash before brunch with friends. She refused to leave the bank branch without the full amount in her account, approximately $40,000. Tchorbadjiev said bank employees handed her a paper bag containing stacks of bills.
Several weeks later, Tchorbadjiev said she learned she owes the bank approximately $3,000 for overdrafts.