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Highway Robbery

Wells Fargo is the first of several banks to face the wrath of consumers in class action lawsuits resultant of their abuses of fees related to consumer checking accounts. In an influential California case Wells Fargo has been ordered to pay $203 Million in restitution. Other major banks are on the chopping block in a national case. The shady practice of artificially arraigning the sequence of debits to an account to maximize the number and amount of penalties brutalizes consumers on fixed incomes, and consumers already at risk, adding hundreds of dollars a month in penalties to a downward spiral. This really should be treated as a criminal enterprise.

Old Time Highway Robbery, same as the New Highway Robbery... Except It's Now Done By the Bank

Wells Fargo faces larger suit on overdraft fees

San Francisco judge’s scathing ruling ordering Wells Fargo to pay its customers $203 million for manipulating debit transactions to maximize overdraft fees might be just the start of troubles for the bank.

U.S. District Judge William Alsup’s 90-page opinion Tuesday described Wells Fargo’s motive as profiteering and said the San Francisco-based bank’s goal was to “maximize the number of overdrafts and squeeze as much as possible” out of customers.

But the hefty tab represents only what Wells owes its California customers. That figure is far smaller than the potential bill from a separate suit in which Wells’ clients in other states have accused the bank of the same unfair practices.

That case, consolidated in federal court in Miami, includes similar claims against 30 other lending institutions, including Bank of America, Citibank, Chase, Union Bank and U.S. Bank.

The crux of the claims is that the banks processed debit transactions from the largest to the smallest, instead of the order in which they occurred, depleting accounts faster and boosting the number of overdrafts, which cost as much as $35 per transaction.

Wells Fargo garnered more than $1.4 billion in overdraft fees just in California from 2005 to 2007, according to court documents. Nationwide, banks and credit unions collected almost $24 billion in overdraft fees in 2008, according to the Center for Responsible Lending.

Wells Fargo, which continues to follow the “high-low” practice that it has had in place since 1998, said it would appeal Alsup’s decision. Wells representatives declined to forecast what the ruling might mean in the Florida matter, other than to say that the California order was not in line with the facts and that the bank’s transactions have been “consistent with the laws and rules of governing regulatory authorities.”

“We have found that high-low gives priority to larger payments and have found that those are the customers’ priority payments … it gives priority to larger transactions,” said Richele Messick, spokeswoman for Wells Fargo.

Messick said that many transactions are received by the bank in a random order without a time stamp, and therefore, the bank needed to determine an order in which to process them.

 
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Posted by on August 12, 2010 in American Greed

 

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Bank Robbery – Then and Now

With the summer Movie blackbuster season well under way, possibly the top movie of the summer will be released this week detailing some of the life of John Dillinger, played by possibly the best actor of his age group, Johnny Depp.

In the 1930 Depression era, bank robbers and gangters became pop culture heroes  – John Dillinger, “Baby Face” Nelson, “Pretty Boy” Floyd, “Machine Gun” Kelly, Bonnie & Clyde, and probably the most deadly gang – that of “Ma” Barker’s boys and Alvin Karpis.

John Dillinger

John Dillinger

Whereas once it was criminals robbing banks – it’s now the banks robbing the public. And like the criminals of the 1930’s – it’s time for the Feds to step in –

Overdraft Fees: A $17.5 Billion Dollar Industry

Consumers being weighted down by overdraft fees may soon have relief in the form of H.R. 1456, The Consumer Overdraft Protection Fair Practices Act. Read the rest of this entry »

 
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Posted by on June 29, 2009 in You Know It's Bad When...

 

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Econocide – The Hidden Death of America

A startling series on TomGram, by Nick Turse brings to light the human toll of the economic meltdown.

Dramatic Rise in Economic Suicide

Dramatic Rise in Economic Suicide

After David B. Kellermann, the chief financial officer of beleaguered mortgage giant Freddie Mac, tied a noose and hanged himself in the basement of his Vienna, Virginia, home, the New York Times made it a front-page story. The stresses of the job in economic tough times, its reporters implied, had driven him to this extreme act.

“Binghamton Shooter” Jiverly Wong also garnered front-page headlines nationwide and set off a cable news frenzy when, “bitter over job loss,” he massacred 13 people at an immigration center in upstate New York. Similarly, coverage was brisk after Pittsburgh resident Richard Poplawski, “upset about recently losing a job,” shot four local police officers, killing three of them.

But where was the front-page treatment when, in January, Betty Lipply, a 72-year-old resident of East Palestine, Ohio, “who feared she’d lose her home to foreclosure hanged herself to death” shortly after “receiving her second summons and foreclosure complaint from her mortgage lender”? And where was the up-to-the-minute cable news reporting on the two California dairy farmers who “killed themselves… out of despair over finances, according to associates”?

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Posted by on June 5, 2009 in News

 

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