Wells Fargo Added Unusual Fees – Until I Call Them
Give Wells Fargo that credit: the bank continues to come up with ingenious ways to deceive customers.
Over the past few years, we’ve seen Wells signing millions of people into accounts they didn’t want, improperly repossessing military cars, and billing customers for insurance they didn’t ask for, resulting in billions of dollars. fines.
Now there is that.
Rick Yelinek, 68, finally raised enough money to pay off the mortgage on his home in Eagle Rock. He stopped at a Wells Fargo branch in Glendale with a cashier’s check and deposited it into the checking account used for his Wells Fargo home loan.
Yelinek was first told that he would have to wait a few days for the check to clear, which he expected, even though it meant Wells would be able to add more interest to his loan. what he did.
Once the check was cashed, however, the bank lived up to its reputation for being unfriendly to customers.
Yelinek was told he would have to shell out an additional $ 30 for a wire transfer to move his mortgage payment from one division of the bank to another.
“I was in disbelief,” he told me. “I couldn’t believe what they were saying.”
Yelinek pointed out to the Wells staff member who looked after her account that he had been a customer in good standing for many years and requested that the $ 30 fee be waived.
“They said they never gave up on wire transfer fees,” he recalls.
Yelinek subsequently filed a complaint with the bank about her treatment. It was in August. “I’m still waiting for a response,” he said this week.
The episode is remarkable on many levels, including the fact that if a bank needs to limit the damage to its reputation by treating people fairly, it is Wells Fargo.
Then there’s this: Yelinek has been a 35-year banking industry veteran, including seven years at Wells Fargo as a loan officer. It’s fair to say he knows the business.
And he is not impressed with the behavior of his former employer.
“It’s typical of Wells Fargo,” Yelinek said. “The bank is so fee-based that it will do anything to get money from customers. “
Wells may be particularly focused on fees, but by no means is he the only one.
Since deregulation in the 1980s, the entire banking industry has become increasingly dependent on people’s money with minimal fees, instead of traditionally focusing on interest on loans.
We are talking about overdraft fees, wire transfer fees, credit card fees, insufficient funds fees, ATM fees, and other fees that over the years have played an increasing role. more important to satisfy profit-hungry bank shareholders.
The Federal Reserve Bank of Cleveland has found in a 2019 study that the so-called non-interest income of banks jumped 25% from 2005 to 2018.
The banking sector as a whole collected $ 12.4 billion overdraft fees only last year, the vast majority of which were paid by low-income people.
Wells Fargo is therefore not alone in strengthening its customers. But its status as the nation’s largest residential mortgage manager gives it ample opportunity to tap into this captive market.
In the nine months that ended September 30, Wells pocketed nearly $ 4 billion in non-mortgage bank interest income, including $ 2.1 billion in “service charges, late fees and incidentals”.
This presumably includes the $ 30 wire transfer fee that infuriated Yelinek.
Wells currently manages approximately 6.5 million mortgages.
“I wonder how much of a $ 30 fee they’re charging for those mortgage payments,” Yelinek said, echoing my own thoughts.
And that’s the key question in any discussion of paid businesses. The outrage is not limited to individual charges, although they are infuriating enough for most consumers.
The real indignation is in the volume of charges. Thirty dollars here, 30 dollars there. Soon you are looking for some serious money.
Other banks may also charge a fee for internal money transfers, but I couldn’t find one of Wells’ stature that does for mortgage payments. Bank of America does not. Neither does the American bank.
“We would do this without needing a wire transfer at all,” said Evan Lapiska, spokesperson for the US bank.
Tom Goyda, a spokesperson for Wells Fargo, said the bank regretted not responding to Yelinek when he first raised the issues in August. “We are contacting him and plan to reimburse the bank transfer fee,” he said.
So Wells Is waive bank transfer fees, it turns out.
Still, the bank didn’t seem to regret inflicting the same fees on millions of other mortgage customers (Goyda was unable to provide an exact number).
“We clearly communicate the options for sending payment funds,” he told me. “These options are set out in the written reimbursement letter and include the ability to pay by certified check to avoid a wire transfer fee.”
Wait, could customers avoid wire transfer fees if they used a certified check but not if they used a cashier’s check? It makes little sense.
The only difference between cashier’s checks and certified checks is that the former are taken from the bank’s own account, while these are taken from the customer’s account. In both cases, the issuing bank checks in advance that the funds are sufficient.
Goyda said certified checks are made payable to Wells Fargo, but a cashier’s check can be made out to the name of the mortgage account holder.
It is a distinction without difference. With both types of pre-verified checks, the money was deposited at Wells Fargo for the express purpose of paying off a Wells mortgage.
Most banks charge a fee for make transfers to other banks, and some charge to receive them.
As such, Goyda said Wells’ $ 30 fee for mortgage repayments was justified even though, as in Yelinek’s case, the bank both initiated and received the wire transfer as it transferred funds. from one part of the business to another.
This, of course, is silly. Wells was essentially arguing that if a cashier’s check is used (but not a certified check), he has the right to charge $ 30 even if he transfers funds from himself to himself.
Goyda offered no response when I reported this. He said, however, that the bank was “reviewing our processes for such transactions” following my inquiries.
And guess what?
Goyda contacted me Thursday afternoon to tell me that Wells had suddenly changed his mind.
“We recognize why Mr. Yelinek and others in his situation would be unhappy to pay fees under these circumstances,” he said.
“We are changing our process so that in the future customers will not be charged these types of fees when transferring funds from a Wells Fargo deposit account to pay off a Wells Fargo mortgage. “
It is commendable. I still wonder, however, how much money Wells Fargo has already made from this practice over the years.
If I were a banking regulator, I would ask myself the same question. And I wonder if a restitution is in order.