Wells Fargo In More Trouble About Overdraft Fees In Garnishments

Posted on: March 4th, 2011 by Steve Larson
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This blog has pointed out big hits Wells Fargo Bank has recently taken for charging excessive overdraft fees by reordering from high to low debit transactions.  Now, Wells Fargo is facing a new charge relating to its overdraft fees.  According to a class action lawsuit filed in Miami-Dade County Court, Wells Fargo charges bogus overdraft fees to customers whose accounts have gone into garnishment to increase its own profits.  The complaint alleges that “Wells Fargo takes advantage of the financial turmoil created by garnishment and targets the weakest customers at a time when they are most vulnerable by mixing legitimate Overdraft Fees with bogus Overdraft Fees in order to generate additional profit for itself.”

According to the complaint, Wells Fargo seizes exempt funds to pay for alleged legal processing services. Specifically, Wells Fargo deducts from the garnished accounts a $100 ‘Legal Order Processing Fee’ and it charges ‘Overdraft/Unavailable Funds Fees’ for every transaction on the garnished accounts during the pendency of the garnishment.  Unlike most situations, account holders are unaware of the effective date of a garnishment order, resulting in their funds being frozen without notice. This means any outstanding checks at the time of garnishment will bounce, creating multiple overdraft fees in addition to the $100 Legal Order Processing Fee that Wells Fargo first takes from the funds in the account.

In addition to charging garnished account holders a $35 overdraft fee for each outstanding draft or withdrawal, Wells Fargo also charges its customers a $35 overdraft fee each time that money is deposited into a garnished account. This is the issue the Wells Fargo class action takes aim at. According to the lawsuit, overdraft fees cannot be lawfully charged by Wells Fargo when funds are deposited into a garnished account.

The Wells Fargo garnished account class action lawsuit is brought on behalf of all Wells Fargo customers who, during the relevant time period, had a checking or savings account garnished and were charged overdraft fees for deposits made into the account during the garnishment period. It is asking that Wells Fargo refund all overdraft fees it charged for deposits made into class members’ garnished accounts during the relevant class period.

A copy of the Wells Fargo Bank Garnishment Overdraft Fee Class Action Lawsuit can be read here.