District Judge William Alsup issued an order in Gutierrez, et al. v. Wells Fargo Bank, N.A., — F.Supp.2d —-, 2010 WL 3155934 (N.D. Cal. Aug. 10, 2010), a certified consumer class action challenging hundreds of millions of dollars in overdraft fees imposed on depositors of Wells Fargo Bank, N.A. through allegedly unfair and fraudulent business practices.
Judge Alsup issued his decision following a two-week bench trial.
The essence of the case is that Wells Fargo has devised a bookkeeping device to turn what would ordinarily be one overdraft into as many as ten overdrafts, thereby dramatically multiplying the number of fees the bank can extract from a single mistake. The draconian impact of this bookkeeping device has then been exacerbated through closely allied practices specifically “engineered”–as the bank put it–to multiply the adverse impact of this bookkeeping device. These neat tricks generated colossal sums per year in additional overdraft fees, just as the internal bank memos had predicted. The bank went to considerable effort to hide these manipulations while constructing a facade of phony disclosure.
Judge Alsup held that these “manipulations were and continue to be unfair and deceptive in violation of Section 17200 of the California Business and Professions Code.” The Court ordered restitution enjoined the bookkeeping device under Cal. Bus. & Prof. Code section 17203.
By CHARLES H. JUNG