Late last year it was reported that Wells Fargo had overcharged its corporate clients by changing already agreed to terms as well as imposing excessive fees for services. Wells Fargo employees were found to be charging these clients foreign exchange rates that were higher than many other financial institutions, let alone rates that Wells Fargo initially offered.
These Wells Fargo employees had many excuses for why this was done, citing “market fluctuations” to be the cause of the unusually high rates but these were just lies told to continue their ostensibly greedy quest for hefty “end of the year” bonuses. Such blatant disrespect for their clientele is uncalled for, and no amount of early boardroom member retirements can merely wash away this stain on their already less than spotless reputation.
Wells Fargo had entered into a business agreement with these corporations to provide specific services at fair market rates. Breaking any agreed business arrangement is a serious violation, but one on such a grand scale brings into question Wells Fargo’s relationship with their many other clients – you and your family.
The sad thing is, these type of questionable “market fluctuations” are not the first time Wells Fargo’s business practices were called into question. This is the same company whose management opened millions of unauthorized accounts from 2009 to 2016 by using fake pin numbers and email addresses. This is the same company that was forced to $185 million to the government and $142 million in a class-action lawsuit settlement. This is the same company that must now pay $1 billion to the Consumer Financial Protection Bureau (CFPB) and the Office of the Comptroller of the Currency for its misconduct related to auto and mortgage lending practices.
We believe other consumers, civilian customers, were most likely overcharged during this time. Those who regularly bank with Wells Fargo are urged to check their accounts and bank service agreements for any discrepancies to see if they were possibly cheated and overcharged as well.
Many consumers with loans from Wells Fargo have already found that they have been charged with extension fees due to the delays caused by the bank itself by not applying its guidelines consistently. Wells Fargo’s policy on their mortgage loans, for example, was “if (a) a mortgage loan application did not close within its initial interest rate lock period in circumstances where the Bank was responsible for the failure of the loan to close and (b) the customer chose to extend the interest rate lock period, the extension fee was to be charged to the Bank, and not the customer.”
However, in many instances, the Bank charged customers mortgage interest rate lock extension fees even though the Bank had caused the loan closing to fail to occur within the mortgage interest rate lock period.” Consent Or., U.S. Dept. of Treasury, Comptroller of Currency, #2018-025 (Apr. 20, 2018.) This practice of passing the cost to consumers under the Bank’s mortgage interest rate lock extension fee practices “constituted unfair acts or practices in or affecting commerce in violation of the unfair acts or practices provision of Section 5 of the Federal Trade Commission Act, 15 U.S.C. § 45(a)(1), and were unsafe or unsound.” Id.
Wells Fargo also required auto loan borrowers to obtain a vehicle insurance policy as collateral and charged consumers for “force-placed collateral insurance.” There was supposed to be a check and verify system before adding the cost, but Wells Fargo did not adhere to their own policies and borrowers who purchased individual coverage were charged anyway.
Consumers who were charged this fee faced additional charges and fees if they did not pay the forced policy premiums. “As a result of the Bank’s improper CPI placement practices, borrowers were improperly charged CPI premiums, interest, and fees, and suffered loan delinquencies due to increased loan payment amounts. In some cases, the Bank improperly repossessed vehicles from borrowers who had defaulted on their loans due to improperly placed or maintained CPI policies.” Consent Or., U.S. Dept. of Treasury, Comptroller of Currency, #2018-025 (Apr. 20, 2018.)
These practices “constituted unfair acts or practices in or affecting commerce in violation of the unfair acts or practices provision of Section 5 of the Federal Trade Commission Act, 15 U.S.C. § 45(a)(1), and were unsafe or unsound.” Id.
The attorneys at KBA are passionate professionals that stand by a consumer’s rights and oppose institutions who knowingly and intentionally defraud their customers. If you or any you know have been overcharged for excessive fees or affected by other unfair business practices like the ones Wells Fargo has engaged in, contact us immediately and tell us your story.