Posts Tagged ‘banking industry’

Lawsuit: Wachovia’s overdraft overreaching

January 15, 2009

This is the third of these class actions filed against large retail banks.  First, I posted about Bank of America and last month it was Wells Fargo and now its Wachovia.   Basically, its concerns how the bank debits a customers account.  According to this complaint, Wachovia debits larger amounts first even if the larger amounts occurred after the smaller amounts.  The claim is that this is a way the bank manipulates its account so that it can charge over-draft fees.

I’ll interested to see how the courts respond to these lawsuits.  I’m betting they will say tough luck customers but I hope I’m wrong.

Complaint courtesy Courthousenews

Wells Fargo overdraft overreaching

December 26, 2008

The lawsuit filed in Northern California Federal court, accuses Wells Fargo of devising a system to take advantage of customers’ overdrafts in order to charge them fees.  The key to the claim is that rather than debit an account in the order in which the transaction was made, the bank withdraws the highest amount first, increasing the likelihood of an overdraft.  Then it fails to notify the customer about the impending overdraft that would give them a chance to pay differently; perhaps by adding funds from a savings account or paying with a credit card.

This suit is similar to the one filed against Bank of America earlier this month I mentioned in this post.

Complaint courtesy Courthousenews.

Bank of America executive firings: bad sign?

December 16, 2008

Today there was a report that 20 top BofA executives were let go.   The blog eye boogies suggests that the numbers of executives losing their jobs could be in hundreds.  Such high profile firings are unprecedented and have caused morale at the company to plummet.  Then there is this deceptive headline in a business journal story: “BofA credit card exec’s departure signals trouble.”  The story states that Bruce Hammond, a co-founder of MBNA, the credit card company purchased by BofA retired but doesn’t explain why his leaving signals “trouble.”

All of these rumblings amidst the reported layoffs of 30,000-35,000 BofA workers makes me wonder if we should get ready for another Citi Corp-like meltdown.  If the credit card division of BofA is in big trouble that might signal the beginning of the next phase of the crisis; credit card company meltdown.

BofA sued for late fee policy

November 28, 2008

So a man goes into a Bank of America branch on the day payment is due and makes a payment which is accepted by the bank.  Guess what?  His next statement claims he didn’t pay his minimum payment in a timely manner, charges him a $39 late fee and rescinds his promotional interest rate.  Other customers have similar difficulty paying their monthly payment without incurring late fees whether through the website or by phone.

I heard a Fresh Air show awhile back about how banks monkey around with late fee dates and the like so they can aggressively charge customers these late fees.  When a customer calls and waits to talk with a customer service representative, these fees will typically be waived.  The credit card expert on Fresh Air explained that the banks know they don’t have a leg to stand on with these practices but they also know that if they make customers wait on the phone for more than twenty minutes its likely the customer will hang up and pay the fee.  These practices are calculated into the cost of doing business and it turns out (no surprise) that the banks make hefty profit margins by cheating and frustrating customers.

Complaint courtesy Courthousenews