Legal News

Judge orders something special for plaintiffs in Wells Fargo class action

By Richard Binder

In a 90-page order filed today, U.S. District Judge William Alsup ruled that Wells Fargo will pay close to $203 million in a class action that alleged the bank processed debit card overdrafts in order to maximize fees.

The plaintiffs alleged that the bank routinely debited customers' largest transactions first, which drew available balances down more quickly. Once there was no more money, the bank would charge an overdraft fee for each subsequent debit.

The bank claimed its customers wanted transactions to be ordered from highest to lowest, and that such a system gave preference to high-priority payments like mortgages and car payments. But Alsup pointed to a 2001 internal memo that predicted commingling debit card transactions with check and recurring payments, like mortgages, would boost overdraft revenue by $40 million nationwide as the real motivation for reordering the transactions. 

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Full post as published by Legal Pad | LA on August 11, 2010 (boomark / email).