Wells Fargo to charge customers to get their own money

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David Lazarus has a column in the SF Chronicle about banks that charge non-customers $5 to cash payroll checks drawn against that bank. The offenders: Wells Fargo (beginning April 1st) and Bank of America. Wells Fargo's reasoning for the fee:

"We're providing a service so we're going to charge for it," said Lisa Stevens, the bank's Bay Area regional president. "The employer (with the business account) is not paying for the employee checks to be cashed."

Why aren't business customers paying for this cost? If a 100 employee business was charged $500 every payroll period to cash its payroll checks, how long do you think that business would remain a bank customer? And what does Wells Fargo think employees are going to do with their payroll checks - frame them?

Wells Fargo does allow these employees to open a free account, which would then allow them to cash their payroll checks without paying the $5 fee. Personally, I don't think that shafting your non-customers is the best way to convince them to open an account at your bank - I'm not a believer in rewarding bad behavior.

This fee is wrong on a number of levels: 1) Wells Fargo and Bank of America are requiring non-customers to pay them extra fees just for doing their regular job - it is not something they deserve extra money for; 2) If the costs of cashing checks are really that burdensome, the business account holder should be charged for those costs, or perhaps Wells Fargo and Bank of America should stop offering business payroll accounts due to their unprofitability; 3) Wells Fargo and Bank of America are shifting costs that should be born by the business account holder onto the banks' non-customers and other banks; 4) A person should not have to pay a fee to get their own money being held at that bank.

This is one of those things that some banks do that should be illegal - the bank is abusing its non-customers only because the bank is in possession of the non-customer's funds and the non-customer has little if any recourse. It is along the same line as banking rules that allow banks to process a checking account's daily deposits and checks in any order they want without liability. (I think that should be illegal too.)

Wells Fargo and Bank of America are banks that I will never do business with. Two other banks were cited in the article that do not charge non-customers a fee to cash checks drawn against their own bank - Citibank and Washington Mutual. I have no knowledge or experience with Citibank, but I can say that I've been a happy Washington Mutual customer for the last few years.

Seeing this story about Wells Fargo reminded me of my experience with them some years ago. I had an account at Wells Fargo and got into some trouble with it during an extended period of unemployment - the account ended up being overdrawn and I had no funds immediately available to cover the overdraft. Wells Fargo closed the account, which I fully expected them to do.

I had a Visa check card issued on that account, which I had used to pay for internet access (AOL). I did not cancel the AOL right away - I figured that when the next monthly payment was due, the payment would be rejected and AOL would then cut off my access. Boy, was I wrong.

Wells Fargo re-opened the account (multiple times), processed the charge, charged the account insufficient funds and excessive overdraft (over-limit) fees, then re-closed the account. Wells Fargo saw nothing inherently wrong in re-opening a closed (and overdrawn) account, solely to maximize the amount of fees they could get from me.

They turned the account over to a collection agency and reported me to ChexSystems (the equivalent of a credit bureau for banks to check records of potential new customers wanting to open new checking and savings accounts), making it almost impossible for me to get a checking account at another bank.

I ended up having to pay 1/2 of the total overdraft to settle the account - Wells Fargo decided that the account maybe should not have been re-opened. They also told me that I would never be able to have an account with them again, which was fine by me - I never wanted to do business again with a bank that would screw treat its customers that way. The new fee that Wells Fargo will charge is even more reason for me to avoid them like the plague.

2 TrackBacks

TweezerMan expresses a similar experience I had with Wells Fargo in his post here: Wells Fargo to charge customers to get their own money Read More

In March, TweezerMan wrote a post, " Wells Fargo to charge customers to get their own money " about banks charging $5 fees to Read More

11 Comments

I absolutely agree with you. I would never bank with Wells Fargo and Bank of America. I had Wells Fargo as my first account as a working individual, which was part-time. I didn't have a hefty pay check to deposit, after a while the fees caught up with me and I was delinquent.

There were over the limit fees, check bouncing fees, monthly fees etc and I had absolutely had enough of them and I never went back. My younger sister opened an account around the same time I did and she stuck with them long time after I did.

I couldn't believe she did. She went through all the changes, the ATM fees, when they went through the in-bank banking or the ATM banking, the limit on the inquiries on the phone per month.... I couldn't believe how many fees they came up with... and not just Wells Fargo but Bank of America too.

I am sure there were other banks joining the band wagon but by then I joined the Credit Union and didn't have no problems with them.

This fee doesn't surprise me at all, but I am still disgusted that Wells Fargo would do this. How dare they? Honestly where does it stop? How can consumers stay as loyal customers when corporations pull stunts like this out of their a$$e$.

I hope all those greedy bastard corporations pay.... and go under, then we'll see the companies who cater to their patrons.

I have never bank with Wells Fargo since there fees were so high compare with other bank. I even return the credit card they once issued to me. The Bank of America has been my bank since I have arrived in US...they were ok until I have filed my bankruptcy in 1994 they screwed up first my checking account and the rest of my account. I fired those Sob and have taken out all my account to them and transfer them to my employers credit union Levi Strauss Credit Union which now Patelco Credit Union after the merging. Now I'm still banking with them with less headaches and no fees to pay. I have Master Card and Visa Card with lower finance charge and earn reward with it whenever I used it. The checking is 100% free with interest earned on monthly basis with interest checking. Free money order, free plastic money, free online payment and free 24 online access to all account and also to other bank links. There are greatttttttttttttt.

Well, I think the $5 fee is fair. The people who have the checks written to them can take them to their own bank for processing. The issue is there are MANY MANY non-customers in the bank, which holds us back in servicing our customers. There are many ways to have a free account with the bank--- Business customers were informed of the $5 charge in January by mail and March with a phone call.

Tim: The issue is there are MANY MANY non-customers in the bank, which holds us back in servicing our customers.

The *real* issue here is that Wells Fargo and Bank of America are using a narrow definition of "customer". To these banks, the definition is "account holder" = "customer". I would contend that if a person has business with the bank, that person is a customer, regardless whether the person has an account there or not.

The paychecks are being drawn against the bank. The employee's money is being held by and at the bank. Why does not having a personal account there at that bank make them any less of a customer? Why is it fair to charge a fee to give these employees their own money? And as stated in David Lazarus' article - what would happen to bank lines if all of these 'non-customers' did open an account at the bank? Precisely nothing.

Tim: The people who have the checks written to them can take them to their own bank for processing. ... There are many ways to have a free account with the bank.

I guess you really have no idea how many people do not have bank accounts of their own, or how many people cannot open accounts at any bank due to negative reports by companies like ChexSystems that are practically impossible to clear.

My impression is that if you're not a Wells Fargo or Bank of America account holder, they could care less where (or if) you cash your paychecks as long as it is not in their banks. A really poor customer service attitude, if you ask me.

Tim: Business customers were informed of the $5 charge in January by mail and March with a phone call.

But did the bank inform the employees who were going to be charged the new fee, since they were the ones who were going to be paying it? Informing a business customer of a fee that they will not be paying is not very helpful. As I said in the post, this is a cost that should be borne by either the business account holder or the bank if it is so burdensome. It's not some big secret that cashing payroll checks takes time and effort, and Wells Fargo and Bank of America just figured it out.

Tim: Well, I think the $5 fee is fair.

Since it appears that the fee violates California state law, perhaps you can explain how "illegal" = "fair"?

"TweezerMan"
In response to your remark:
"I guess you really have no idea how many people do not have bank accounts of their own, or how many people cannot open accounts at any bank due to negative reports by companies like ChexSystems that are practically impossible to clear."
Yes there are many people on ChexSystems. True, it is indeed near impossible for them to get a checking account until they resolve the issue which is "nearly impossible to clear". However there is one thing you forgot to mention. It wouldn't be hard to clear if they would just pay thier debt! These people are deadbeats as I suspect you are.
If you don't want to pay the $5 fee at Wells Fargo go somewhere else and stop your crying. You don't have to cash it at a Wells Fargo now do you?? There are plenty of other places that will do it and I bet it will cost you at least $5.00. And one last thing. Wells Fargo is a business not a charity. Try going to the movies and see if they will let you in for free. I doubt it. Now get a life.

To "Get real" (whoever the hell you are):

I didn't forget to mention that "It wouldn't be hard to clear if they would just pay thier debt!" because paying their debt doesn't clear their record at ChexSystems. Even after paying their debt, banks still flatly reject applications for new accounts because the (now paid) debt is still listed in ChexSystem records. How is that these people are "deadbeats" if they've paid their debt??

If you don't want to pay the $5 fee at Wells Fargo go somewhere else and stop your crying. You don't have to cash it at a Wells Fargo now do you?? There are plenty of other places that will do it and I bet it will cost you at least $5.00.

You clearly miss the entire point. If you're holding a check, payable to you and drawn against a Wells Fargo bank account, why should you have to take it anywhere else? The money is at Wells Fargo bank, in a Wells Fargo business customer's account. Yes, other places probably do charge more than $5, but for them, such a check is a 3rd party check.

It should go without saying that cashing checks written against Wells Fargo accounts is a necessary consequence of offering checking accounts. If cashing checks is so time-consuming and expensive for Wells Fargo, the *account holder* should be charged the $5, not the people cashing the checks. It's not the employees' fault if their employer was dumb enough to have their accounts at Wells Fargo, and the employees should not have to contiunously pay for that decision, paycheck after paycheck.

The one doing the "crying" here is Wells Fargo - crying about how there's so many non-account holders wanting to cash their paychecks and now Wells Fargo wants to be paid extra to do a job they're already being paid to do.

And one last thing. Wells Fargo is a business not a charity. Try going to the movies and see if they will let you in for free. I doubt it. Now get a life.

Being a business is no excuse for Wells Fargo to take money from employees' paychecks that they're not entitled to. Charge the fees to the business account holders (employers) instead and see how much "business" Wells Fargo has afterward. If businesses won't tolerate paying the fees for all of their employees, it certainly isn't right to stick that fee to the employees instead.

A better example: Try going to the movies with a free pass and finding out that there's really a $5 surcharge to get in and see how far that flies. Not very far, I'd imagine.

I really don't mind discussing the issues, but the personal attacks were not necessary. When you pull your head out of your ass and can write something that is not ignorant and uninformed, feel free to come back, assclown.

I just started working with a company that uses Wells Fargo for the payroll. I was amased when they told me I would be charged for cashing a check drawen on their bank! Banks that do payrollaccounts already charge the account holder a fee on the account to proccess the checks, so by charging the payee they make extra cash, sounds like double dipping to me! Then this bank has the nerve to have on of their employees stand in the line at the bank and ask if I would like to open an account so I can give them more of my hard eraned money for nothing! I think that better banks are out there and more people and businesses should move their accounts and save their own money!

just in case nobody has noticed, wells fargo bank is the biggest ripoff since snake oil. nobody i know banks there because of all the added fees they charge customers. in my humble opinion, almost any other bank is better than wells fargo. peace

I would like to say that being a Wells Fargo employee you understand why the $5 fee applies. I am a branch manager that tried to not force the issue of charging the fee and then began to realize that my branch was servicing more non account holders with their payroll checks. This was alarming to me when I saw that we were loosing money while trying to give great customer service. What is so great about giving a mechanic that is cashing their check $500 w/out a fee having him robbed the minute he walks out the branch? I would rather see that same customer walk in and have a financial discussion with my personal banker and see what we can do to help them succeed financially. I know that all the critics of the banking world see it as a "banking" world. When in reality things have changed most of the institutions that are on the right track have learned that we are a financial service industry and are in the business of providing financial advise and product knowledge.

Something to observe, checks have on them the words (printed for and approved by the bank) "Pay to the order of ... the sum of...." The check is a promise by the bank, acting as an agent of the account holder, a certain sum. For the bank to pay anything less than the named sum is fraud. You can't promise someone $50 and then give him $45, saying there was a fee. It makes the promise false. Banks could, using this logic, charge fees for more than the check, having the payee pay money to give the check for the bank. Not solid thinking.

I opened a Bank of America checking account about 10 years ago. I was 18 at the time. About 6 months after I opened the account I had a check book stolen and checks written for about $2000 (which put me $1500 overdrawn)before Bank of America put a hold on my account. I reported to the bank that my checks had been stolen but the damage had already been done. Now here is where I totally screwed up. I never reported the stolen check book to the police and I never followed up with Bank of America. I was young and stupid and simply didn't bother to resolve the issue. Eventually Bank of America handed my account over to a debt collector and put me on ChexSystems for 5 years.

So here we are, 10 years later, in the present day. I bought a condo a while ago and I am trying to refinance the mortgage. Bank of America is offering me an AWESOME mortgage rate but ONLY IF I OPEN A CHECKING ACCOUNT WITH THEM. Here is my question: Will Bank of America keep those records from 10 years ago and try to collect on me if I open up a checking account with them today? Is there any kind of statue of limitations on debts like that? Will Bank of America even approve my request to open a new account? If they are going to take all of my money the second I open the account I'd like to know so that I can go refinance with someone else. I can't exactly ask the account manager at the bank, so I'm asking here. Does anyone know?

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This page contains a single entry by TweezerMan published on March 17, 2004 9:22 AM.

Plugin bugs discovered during setup of Rhye's Recent Entries was the previous entry in this blog.

Charging fees to cash paychecks is illegal in California is the next entry in this blog.

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