The New York Times explains a new issue by describing what happened when Xavier Einaudi tried to close his Wells Fargo checking account.
For weeks after the date the bank said the accounts would be closed, it kept some of them active. Payments to his insurer, to Google for online advertising and to a provider of project management software were paid out of the empty accounts in July. Each time, the bank charged Einaudi a $35 overdraft fee… By the middle of July, he owed the bank nearly $1,500. “I don’t even know what happened,” he said.
Current and former bank employees said Einaudi was charged because of the way Wells Fargo’s computer system handles closed accounts: An account the customer believes to be closed can stay open if it has a balance, even one below zero. And each time a transaction is processed for an overdrawn account, Wells Fargo tacks on a fee. The problem has gone unaddressed by the bank despite complaints from customers and employees, including one in the bank’s debt-collection department who grew concerned after taking in an estimated $100,000 in overdraft fees over eight months…
Most banks program their systems to stop honoring transactions on the specified date, but Wells Fargo allows accounts to remain open for two more months, according to current and former employees. Customers usually learn what happened only after their overdrawn accounts are sent to Wells Fargo’s collections department. If the customers do not pay the overdraft fees, they are reported to a national database like Early Warning Services, which compiles names of delinquent bank customers. That often means a customer cannot open a new bank account anywhere, and getting removed from the lists can take hours’ worth of phone calls.
of this story at Slashdot.
Source:: Slashdot