Lawmaker presses Wells Fargo on checking account refunds
Wells Fargo is once again taking criticism for its treatment of customers, this time over potentially “hundreds of millions of dollars” in fees charged on two popular checking accounts, according to a letter from a member of the House Financial Services Committee.
Rep. Katie Porter, D-Calif., pressed new Wells CEO Charles Scharf in a Nov. 21 letter for details about how the bank is fixing “widespread confusion” about whether customers would be charged $10 monthly fees on the bank's Everyday Checking and Opportunity Checking accounts. Porter asked whether Wells has made any refunds and the total dollar amount.
The bank disclosed the potential problem in its last three quarterly filings with the Securities and Exchange Commission, saying it was reviewing how its past disclosures may have confused customers about which kind of debit card transactions counted toward a waiver of the fees. Customers who conduct at least 10 transactions do not have to pay the fee. According to Porter's letter, few account holder knew that ATM withdrawals are not counted.
“Based on the possibility of confusion by some customers regarding the transactions that counted toward the waiver, we expect to refund certain monthly service and related fees to affected customers,” Wells said in the quarterly filings.
A Wells Fargo spokesman, who acknowledged the company received the letter and would be responding to Porter, said in an email Friday that the bank has made improvements to how it informs customers of the ways they can have their monthly service fees waived and track their progress. About 90% of Wells' customers do not pay monthly service fees on their accounts, the spokesman said.
"We also are taking action to address potential confusion in the past about how to qualify for a fee waiver through debit card use," the spokesman said. "It’s the right thing to do for our customers, and supports our work to build customer relationships that last a lifetime.”
The problem comes as the bank is trying to clean up a pattern of scandals starting in 2016 when employees were found to be opening bogus accounts to meet aggressive sales goals. Wells has also since settled claims related to allegations of overcharging borrowers, including veterans, for auto insurance and home loans as well as making false certifications over Federal Housing Administration mortgages.
Scharf replaced interim CEO Allen Parker in late October. Parker had stood in after Tim Sloan stepped down earlier this year. The previous CEO, John Stumpf ,was ousted in 2016 after its phony-accounts problems came to light.
“Returning the funds the bank collected in violation of its own stated policies tops the list of available opportunities to do the right thing, particularly given the bank’s belief that this matter is serious enough to disclose to investors in its quarterly eeport,” Porter wrote.
Porter added that it would be “entirely inappropriate” to require harmed account holders to take any action in order to retrieve a refund. Porter gave Wells Fargo until Dec. 1 to respond to questions around the problems.