Wells Fargo Must Pay $203M To Customers After Supreme Court Rejection
by Ashlee Kieler, Consumerist
Nearly six years after a federal court ordered Wells Fargo to pay $203 million in refunds to customers victimized by the bank’s overdraft policies — and after years of bouncing back and forth through the appeals process — the U.S. Supreme Court has decided to let that judgment stand.
The original case involves the policy known as “stacking” bank transactions, in which a bank processes a customer’s larger transactions before the smaller ones. This increases the likelihood of the customer overdrafting and enriches the bank, which can reap multiple overdraft penalties for each of the smaller transactions.
The plaintiffs alleged that Wells Fargo’s policy violated a California consumer protection law. In 2010, the judge in the case ordered the bank to pay the $203 million to customers of Wells Fargo who were affected by the overdraft policy between Nov. 2004 and June 2008.
In 2012, the 9th U.S. Circuit Court of Appeals set aside that mountain of cash, saying California law can not override federal banking laws. However, the court did uphold the lower court’s decision that Wells Fargo had used “misleading propaganda” to deceive customers into believing their transactions were being processed in the order in which they were made.