Wells Fargo left ATM withdrawals out of its fee-waiver count, then promised refunds

Banking Dive reported on Dec. 5, 2019 that Wells Fargo would start refunding some checking-account customers in 2020 over a monthly-fee policy that Rep. Katie Porter had called unclear the previous month. Instituted in 2013, the policy let customers avoid the $10 monthly fee on Everyday Checking and Opportunity Checking by making 10 or more posted debit-card purchases and/or payments a month. ATM withdrawals did not count.

Current and former employees told The Capitol Forum in August that for years the bank left it to branch staff to explain that distinction verbally. Wells Fargo began sending customers alerts on how close they were to the threshold in early 2018 and now spelled the policy out in its fee documents. In May it had disclosed to the SEC 'the possibility of confusion' among some customers.

In a letter to Porter, new CEO Charlie Scharf said the bank was working with regulators on a comprehensive remediation plan to compensate customers affected by how it described the waiver. He did not say how much it would pay. Active accounts would be credited, others sent checks, and no action was required of customers.

The rule excluded ATM withdrawals from the purchase count, but the bank relied on branch employees to explain this orally.

Wells Fargo disclosed to the SEC in May 2019 the possibility of confusion before it began any remediation.

The bank's earlier scandals, including millions of fraudulent accounts, left it under scrutiny from regulators and lawmakers.

A fee rule that depends on staff explaining what does not count will confuse customers. When the bank has already lost trust, small fee confusions become scandals.

Wells Fargo said remediation would begin in 2020. Its spokesman said roughly 90% of customers avoid checking-account service fees by meeting other requirements, so the number of customers affected was unclear. Scharf had taken over as CEO in October 2019.