Wells Fargo to refund checking fees after lawmaker flags issue
Wells Fargo will refund some checking account customers beginning next year after reviewing past disclosures that stirred confusion over which kind of debit card transactions counted toward a waiver of monthly fees, according to a letter CEO Charlie Scharf sent to Rep. Katie Porter, D-Calif.
Porter flagged the issue in a Nov. 21 letter to Scharf and asked how the bank planned to fix the problem. Wells had disclosed “the possibility of confusion” among Everyday Checking and Opportunity Checking accounts and the potential for refunds in its last three quarterly filings with the Securities and Exchange Commission.
Scharf did not indicate how much the bank could refund in total, according to a Dec. 2 letter sent in response to Porter.
“We are working closely with our regulators to finalize a comprehensive remediation plan to compensate customers who may have been affected by the manner in which we described how using a debit card could result in the waiver of monthly service fees,” Scharf wrote. “We expect that remediation will begin in 2020.”
Customers who conduct at least 10 transactions do not have to pay the bank’s $10 monthly service fee, but according to Porter's letter, few account holders knew that ATM withdrawals are not counted.
The $1.9 trillion-asset bank is planning to identify a target population of account holders and determine which ones were affected, Scharf wrote. Once the bank calculates the appropriate refunds, accounts that are still active will be credited and customers whose accounts are no longer active will receive checks in the mail. No action will be required by the affected customers, and they will receive a letter explaining the refund, according to Scharf’s letter.
Wells Fargo is attempting to move past a string of scandals going back three years when employees were first found to be opening bogus accounts to meet aggressive sales goals.
Scharf took over as CEO in October. He is bringing on Scott Powell, the chief executive of Santander Holdings, as chief operating officer to help with the turnaround.
“Our priorities today are clear: Address all regulatory and control issues in the company and serve our customers every day with the highest operational and ethical standards to enable them to succeed financially,” Scharf wrote to Porter. “We feel a great sense of urgency to deliver on these priorities and we will allocate the necessary resources to do so.”