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Wells Fargo Overdraft Fees
- Issue: $203 million in restitution
Gutierrez v. Wells Fargo Bank Summary
In August 2010, U.S. District Court Judge William Alsup issued a 90-page opinion finding that Wells Fargo manipulated its processing of customer debit card purchases by its California customers to maximize overdraft fees in violation of California state law. Instead of posting transaction chronologically, Wells Fargo deducted the largest charges first, drawing down available balances more rapidly and triggering a higher volume of overdraft fees. Judge Alsup ordered that Wells Fargo return to its customers approximately $203 million in restitution and enjoined the abusive accounting practices.
Judge Alsup's decision followed two and a half years of extended litigation that culminated in a two-week bench trial which ended in May 2010. The judgment against Wells Fargo constituted the 4th largest judgment in California in 2010, and the largest judgment in a class action lawsuit.
Lieff Cabraser partner Richard M. Heimann served as Lead Trial Counsel and tried Gutierrez along with partner Michael W. Sobol. For their work in the case, Richard Heimann and Michael Sobol were recognized as finalists for the 2011 Consumer Attorney of the Year Award by the Consumer Attorneys of California.
Video - Consumer Attorney of the Year Award Finalists
Wells Fargo Bank Overdraft Fees Case Update
The case before Judge Alsup was brought on behalf of California Wells Fargo customers who, from November 15, 2004 to June 30, 2008, incurred overdraft fees on debit card transactions as a result of the bank's practice of sequencing transactions from highest to lowest. If you are a member of this Class, you do not need to take any action at this time to remain a member of the class.
In September 2010, Wells Fargo filed an appeal with the Ninth Circuit Court of Appeals. In December 2012, the appellate court issued an opinion upholding and reversing portions of Judge Alsup's order, and remanded the case to the district court for further proceedings.
On May 15, 2013, Judge Alsup reinstated the $203 million judgment against Wells Fargo. Commenting on the Judge's decision, Michael W. Sobol stated, "There has never been any question that Wells Fargo used accounting tricks and directly misled its customers to hide those tricks to boost its revenue at the expense of its own customers. It is now time for Wells Fargo to act as a responsible corporate citizen. Over one million California consumers are entitled to relief. They should not have to wait any longer for Wells Fargo to return their money."
Lieff Cabraser also serves on the plaintiffs' executive committee in a multi-district litigation action before U.S. District Court Judge James Lawrence King in Miami, Florida, against the nation's major banks for the same fraudulent overdraft practices. Learn more about the national bank overdraft fee litigation at www.bank-overdraft.com.