According to the Los Angeles Times (4/4/16), on April 4 the US Supreme Court declined to hear Wells Fargo’s appeal of a $203 million award handed to Wells Fargo customers. That award was given in a lawsuit filed by Wells Fargo customers who alleged Wells Fargo reordered debit transactions to maximize profits from overdraft fees. Rather than posting transactions as they occurred, Wells Fargo reportedly reordered the transactions from highest to lowest, pushing customers into overdraft more quickly and increasing the number of times they were charged overdraft fees. Plaintiffs in the Wells Fargo lawsuit were charged anywhere up to $35 per overdraft transaction, according to court documents.
In 2010, US District Court Judge William Alsup agreed with plaintiffs that they had been misled by Wells Fargo’s practices. The judge awarded customers $203 million finding that Wells Fargo violated California law, earning up to $1.4 billion in overdraft penalties in California between 2005 and 2007.
“These neat tricks generated colossal sums per year in additional overdraft fees, just as the internal bank memos had predicted,” Judge Alsup noted at the time.
“The bank went to considerable effort to hide these manipulations while constructing a façade of phony disclosure.”
READ MORE CREDIT UNION EXCECESSIVE OVERDRAFT FEES LEGAL NEWS
Wells Fargo then appealed to the 9th Circuit Court of Appeals and later filed a motion to the Supreme Court to hear its case. When it appealed to the Supreme Court, Wells Fargo argued that plaintiffs had not proven they relied upon written policies provided by the bank. But the Supreme Court said it would not hear Wells Fargo’s appeals, effectively upholding the $203 million award.
The lawsuit is Wells Fargo Bank v. Gutierrez, et al, case number 14-1230, in the Supreme Court of the United States.