Wednesday, February 10, 2010

Wells Fargo's Secret about Overdraft Protection

Now that I have bills to pay, two things have happened. First, I started using Wells Fargo's online banking's bill pay feature. Second, I wrote a check for more money than I had in my checking account. Oops. I had the money, it was just in my savings account. I forgot to check the amount of money in my checking account.

Anyway, let me show you what Wells Fargo has to say about "What is the fee for using Overdraft Protection" (and I use my credit card, so I will only show that portion):
When there are insufficient funds in your account to cover a check, withdrawal, or automatic payment that you have authorized, and you have Overdraft Protection, we pay the Item and charge you an overdraft protection transfer/advance fee.

One overdraft protection advance fee will be assessed each day your credit card provides Overdraft Protection, regardless of the number of items that post to the account. The fee is dependent on the total amount of the advance:
  • $10 if the total of Overdraft Protection advances for the day is less than $25.00.

  • $12.50 if the total of Overdraft Protection advances for the day is $25.01 - $100.00.

  • $15.00 if the total of Overdraft Protection advances for the day is $100.01 - $500.00.

  • $20.00 if the total of Overdraft Protection advances for the day is more than $500.00.
We will transfer the exact dollar amount to cover the overdraft, subject to a minimum Overdraft Protection advance amount of $25.00. If the amount of available credit on your Card is less than $25.00, we will transfer the amount of the available credit.
In my situation, I was short about $12 and had plenty of credit. How much should I have been charged?

Now guess how much I was actually charged?

Wells Fargo charged me $10.28. What Wells Fargo never told me about overdraft protection is that they charge me interest when they loan me my own credit and that interest starts accumulating immediately. What a scam! If I pay with my credit card directly, I do not have to pay interest for about 30 days. Since I did not pay off any of my credit card charges until the normal due date about 14 days later, I accumulated 28 cents interest on the $10 that I owed Wells Fargo.

No one at Wells Fargo never told me about this. All they ever say about overdraft protection is "it is a free service that will only cost you a once-a-day fee when you use it". Then, if you read this amazing story, you will start to think that the workings of overdraft protection are a secret even to Wells Fargo (or at least those that interact with customers).


  1. Still better than Etrade. They charged me $25 for not having the money to cover a check, yet they still did not pay the check. I was $2 short on my account. I end up paying the $25 on Etrade, plus some extra fees on the other side since Etrade did not cover the check. Why then did Etrade charged me $25?

  2. I had a similiar experience. Had a deposit which did not post and a 50.00 check which was covered as INSF. It cost me 23.50 for several hours. My savings was 5 digit. They also charged me a service charge on my 2 savings accounts and my two checking accounts. I work hard and have excellent credit. We can expect more of this from big banks. I'm tired of running detective work on my bank accounts. I have just opened an account with a savings & loan community bank called Mision Federal Bank. Enough is enough.

  3. That is exactly what we will be doing too. We will be closing our Wells Fargo account and move everything to a credit union.
    Wells Fargo's customer service is just as horrible as Comcast's customer service.
    They are willingly to take your money away, but refunding it is a completely different story!!!!

  4. Wells Fargo is stealing my money, It seems like it, I don't know why they charged me $35.00 for overdraft fees , So many times ! They owe me thousands of dollars ! How can I get it back ? I know I have to file a claim . Is that with a Lawyer ? Can anyone help me ?

  5. I paid for a jersey from a well documented fraud site. Unfortunatly, I did my home work two days after. They have tons of victims, most of which say their bank refunded their card. Wells Fargo closed my card, but refused to refund, saying it was not fraud, as I willingly gave my cc number.I guess fraud protection is a subjective term to them.

  6. Think that is bad try getting a Home Mortgage from them....They put me into bankruptcy and then they kept not positing payments on time. They are worthless. Try a credit union on you checking account. They do not charge you for transfers with overdraft protection!

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