Threat Of Small Claims Court Gets Wells Fargo Overdrafts Refunded

After he got some overdraft fees that he felt were unfair, Karney Hatch decided to put the banking system on trial, and make a documentary about it.

He opened a new Wells Fargo card, put only a dollar in it, then bought several $1 items at the local mall, running up over $100 in overdraft fees. Naturally, Wells Fargo refused to refund any of his overdraft fees. So, he took them to small claims court. Rather than pay the cost of sending someone to defend the case, Wells Fargo refunded his overdrafts and even paid the about $47 it cost him to file.

Says Ralph Nader in the documentary, “If a million consumers filed a million small claims court actions a year against the banks, the banks would either try to abolish the small claims court or improve their performance.”

Taking a company to small claims is not that hard, we’ve written several posts that tell you how to do it.

How To Beat The Bank [Current] (Thanks to Kane!)

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  1. pete7919 says:

    Clicking the link on the how-to posts gets no results!

    “We can’t find any posts with those tags. Or check your spelling and try again.”

  2. Alarmpro says:

    Maybe I’ll try this to recover that $42.00 hot dog I ended up with last month.

  3. ct_price says:

    Not a fan of the method – it would be more believable if he were just being an average consumer to demonstrate his point – but I do approve of the solution. Small Claims court unfortunately is an effective way to bring corporate giants to their knees…or at least open their ears.

    • ThinkerTDM says:

      @ct_price: You mean “fortunately”. Otherwise, we would be forced to lay back and take whatever corporations gave us.

    • hypochondriac says:

      So guess the Bank didn’t have binding arbitration? Problem is don’t most bank have that clause?

  4. Anonymous says:

    Taking someone to small claims court sounds awesome. However, I thought every company and their mother had that provision in an agreement about binding arbitration being the only method for seeking resolution.

  5. Brontide says:

    He *intentionally* overdrafted his account and then sued to get the fees back! How is this fair to all the other bank customers that have to pay for his documentary.

    It’s not like he was exposing the reordering of clearing charges for maximum profitability or showing some other obscure, but profitable example of malice, but just overdrafting to show how he thought the fees were unfair.

    • nakedscience says:

      @snowmoon: ” but just overdrafting to show how he thought the fees were unfair.”

      Uh. Yeah. That was the freakin’ point!

      • Oddfool says:

        @nakedscience: I realize that the overdraft fees are completely ridiculous and extreme (I have paid for a couple in my past), but intentionally racking up the charges for his documentary sounds a lot like knowingly paying with a check with insufficient funds. Isn’t there a law he is breaking here? If so, he has nicely documented his crime.

        • TEW says:

          @Oddfool:
          I thought so too. Even if he did not break any laws this is very low and should be looked down upon. It might be funny if the Wells Fargo lawyers see this and go after him for fraud.

        • wjamny says:

          @Oddfool:
          If the bank would have just declined the purchases (expecially since he had no funds available) then there would be no issue, but that however gets in the way of the banks gouging it’s customers for excessive overdraft fees.

          • johnva says:

            @wjmany: Irrelevant. He’s still intentionally doing it, which means that he has no right to have them refunded in my book. I hope Wells Fargo counter-sues him using the evidence from his “documentary”.

            • wjamny says:

              @johnva: I understand your point, however; don’t you think the bank should stop allowing charges to the card at somepoint (after the 3rd+ transaction?) rather than allowing it to continue in order to collect multiple overdraft fees?

          • Oddfool says:

            @wjmany: The times I have had the overdraft fee were times I really needed the item I was purchasing. (wiper blades for car on heavy rain day) I thought I had the money, but there was one automatic fee I had forgotten about. Had the purchase been declined, I would have been unable to drive to work. I am aware of the overdraft fees my bank charges, and am glad my transaction went through.

            Mr. Hatch in this case here doesn’t appear to be in the same position. While his previous overdraft fees may have been, for this documentary he deliberately made those purchases on an account he set up for this purpose with insufficient funds. For that, he has no right to complain about the banks process.

            If he wants to protest their fees, he can take his business elsewhere, and spread his message to other banking customers.

            • Michael John Szabo says:

              @Oddfool:

              Isn’t one of the points that he CANT take his buisness elsewhere? Is there a bank that doesn’t have the same overdraft policy? I thought I had a good bank but my fee is $30, not that I have ever had that happen to me. Is there a bank that lets you opt out?

              I would agree it is an abuse of the system though. If Wells Fargo had sent a representative to court it should have won, AND given Well Fargo reasonable court costs, which even then probably would have cost Wells Fargo more than the $150 they paid him, but that is Wells Fargo’s problem. Hence this is probably why they settled.

    • Damocles57 says:

      @snowmoon: I think part of his point, especially with a debit card, is to show that with the real-time technology, banks could deny the purchase and he would avoid the overdraft fee since there would be no overdraft. He was not suing for wrongful application of overdraft fees on specific purchases, but was suing to show that the process or practice of overdraft fees in and of itself has serious flaws.

      The float that used to exist between the time of writing a real check and the check actually clearing (with any deposits happening in between) does not exist in quite the same way as it did a few years ago.

      It would be easy to have the terminal at the store display a message that the purchase is denied for any reason without incurring additional fees. By not allowing this, banks are in fact “allowing” the overdraft to occur in order to trigger the amount of fines (fees, taxes, penalties, etc.) they have imposed.

      Think civil disobedience, think Rosa Parks, think Sit-Ins, etc. Just because someone or some agency makes a rule does not make the rule right. To blindly follow the dictates of Big Brother makes you a willing lamb led to the fleecing. Big Brother does want to slaughter the lamb, only fleece it as much as possible before it dies.

      • Damocles57 says:

        @Damocles57: Forgot an important word in last paragraph above:

        Think civil disobedience, think Rosa Parks, think Sit-Ins, etc. Just because someone or some agency makes a rule does not make the rule right. To blindly follow the dictates of Big Brother makes you a willing lamb led to the fleecing. Big Brother does NOT want to slaughter the lamb, only fleece it as much as possible before it dies.

        • Cupajo says:

          @Damocles57: Are you actually comparing Rosa Parks with some dude who intentionally wrote cold checks? Seriously?

          I agree that overdraft fees are excessive, but come on! There has to be some level of responsibility on the part of the consumer! The easiest way to avoid overdraft fees is to not write checks over the amount you have in the bank, which is really easy to determine if you balance your checkbook.

          • Sheogorath says:

            @Cupajo:
            It’s the traditional (and generally most effective, if it works) way of protesting something you don’t think is fair/words/legal/whatever.

            You break that law/rule, and you take it to court. It’s an option which carries great risk and great reward.

            I wouldn’t go so far as to put this guy in the same league as Rosa Parks and so forth, but you have to admit, he’s got balls.

          • Damocles57 says:

            @Cupajo: I’m pointing out that one person’s response to a specific problem is their unique way to deal with it whether we agree or understand.

            History is replete with examples of people who “broke the law” and who were later vindicated. Rosa Parks who was tired and did not want to give up her seat was a tired person at that moment who was unwilling to take it anymore. I don’t believe even Rosa Parks then had any idea what course society would take and how we now have glamorized and authenticated her actions in retrospect. Would you have argued then that she should have just followed the law instead of causing so much trouble?

            Greenpeace who force arrests on themselves, Gandhi, Kevorkian in Michigan, activitists in many states who want marijuana legalized, etc. use the system to point out areas of needed (or desired) change.

            It is precisely because there are people like Rosa Parks, and Gandhi, and Thoreau, and MLK, JR., and Karney Hatch, and the thousands of other unsung heroes who daily resist the heavy-handed rule of bureaucratic systems that we have some semblance of humanity in the impersonal machinations of today’s society and economy.

          • Jabberkaty says:

            @Cupajo: Actually, the easiest way to avoid them would be to have your card declined when you had insufficient funds. Then you wouldn’t get any overdraft fees.

            The easiest way not to get your card declined would be to keep track of your funds.

  6. lincolnparadox says:

    …”the banks would either try to abolish the small claims court or improve their performance.”

    Something tells me that if the banks have a lobby that can get them hundreds of billions in loans from the federal government, that if we all started suing our banks, that we would quickly lose our right to sue banks in small claims court.

    • I_am_Awesome says:

      @lincolnparadox:

      Simple solution – if someone files a small claims lawsuit that the judge decides is completely without merit (as was the case here), the plaintiff should be forced to pay the defendant’s costs. Or better yet, triple the defendant’s costs. ;)

      I think that would cut down on the abuse.

  7. microcars says:

    “several Posts that tell you how to do it”

    We can’t find any posts with those tags. Or check your spelling and try again.

    I may have to take my own bank to Small Claims if they don’t put the $300 back in that was eaten by their own ATM.
    I was going out of town and went to the drive-up at 6am, put in my card, asked for $300, machine went through all the motions, gave me a receipt but no cash!
    It spit my card back after doing this and promptly put up a “Temporarily Out of Service” status on the monitor.
    I took a pic with my iPhone so I have a dated and Geo-located pic.

    I drove to another branch and was able to get $300 out with no problem.

    Called the bank as soon as they were open “No problem” they said “Should be credited to your account within 10 days.
    10 days later nothing.
    New person on phone says an affidavit should have been filed for me, she would do so, “Should be 10 days”
    10 days later, nothing.

    • mac-phisto says:

      @microcars: here’s a suggested course of action:
      1) get a copy of your bank’s EFT agreement (should be available online & at a local branch). look for the section usually entitled “in case of errors…” this will spell out the timeframe for resolving inaccuracies.
      2) contact your bank’s regulator & file a complaint. you should be able to find an advocate willing to help you.
      if it’s a national bank: [occ.gov]
      if it’s a mutual savings bank/thrift: [ots.gov]
      if it’s a credit union: [ncua.gov]
      if the institution is state-chartered, you’ll want to contact your state’s department of banking.

      you should also speak with the manager of the branch where you had the problem, find out who services their atm & if there were balancing inaccuracies that coincide with your failed withdrawal (typically, a machine is balanced every time it is serviced). you might want to do this before you contact the authorities.

  8. I_am_Awesome says:

    It’s no wonder companies are such big fans of mandatory binding arbitrary. This guy did not get justice. He exploited the fact that small amounts of money aren’t worth the time and expense it would require for a large company to send someone to small claims court. If a company used this sort of tactic, you would criticize them.

    • JGKojak says:

      @I_am_Awesome: @pecan 3.14159265:

      Uhhhh…. no.

      Everyone agrees on the personal responsibility thing, but then by your logic, people should just be thrown in jail for overdrafting- because, hey- its their own fault isn’t it?

      The point of all this is:
      1) People should have a CHOICE whether to allow debit cards to allow overdrafts or just reject if their are insufficient funds (including at the ATM).

      2) Banks should not be allowed to structure deposits/debits in a way that maximizes consumer exposure to overdrafts and therefore maximized their profits- banks work for YOU, its YOUR money, and they should actually be directing deposits in either an unbiased way (first come first serve) or with an algorhythm that helps consumers avoid overdraft.

      3) The penalty is extreme- the laws should say you can’t be charged more than the purchase amount for an overdraft – overdraft your mortgage, fine, that’s $35. Overdraft for a coffee- that $1.25. Since no actual labor is involved by banks to accomplish this, seems fair.

      • johnva says:

        @JGKojak: There is a difference between unintentional overdrafting (for which I have SOME, but not total, sympathy) and intentional overdrafting like this guy did. He did it KNOWING what the result was, which means he deserved not a dime back.

        • Damocles57 says:

          @johnva: What about banks intentionally gaming the system to force a consumer into an overdraft situation? Should they be entitled to unjust enrichment because they control the circumstances they manipulate to extract as much money as possible from you?

          Banks count on the fact that the average consumer is not willing or able to afford the costs of fighting small dollar fees and penalities but the same banks can hire attorneys for hundreds of dollars an hour to write, structure, and enforce these schemes against the consumer.

          • johnva says:

            @Damocles57: No one is ever forced by a bank to overdraft. I agree that sometimes bank fees can be a bit unfair (such as when they pull the transaction “reordering” thing to multiply the fees). But that’s not the case in this instance. He intentionally overdrafted himself, knowing what the consequences would be.

            • T Axel Jones says:

              @johnva: Not true. A while ago I was the victim of credit card fraud on my Debit Visa card. This was linked to my checking account. $600 was withdrawn, which put me just over the limit. (I had $550 in the account at the time). That’s just one $36 fee, right? No, because there were a half-dozen other smaller charges that came through on the same night (TV bill, phone bill, groceries, gas purchase, etc.). For every one of these overages I was hit with another $36 fee. This is because the bank intentionally put through the largest charge first, regardless of the order they came in. Sure, they refunded the $600 after I started the chargeback, but they hesitated on refunding the overdraft fees. After an hour on the phone working my way up they agreed to refund one half the overdraft fees. It took a week of begging and pleading my case to get them to recognize that as I was the victim of a crime I should not be forced to pay for an overdraft I did not intentionally incur.

              Eventually I got it all straightened out, but it took two certified letters and hours of telephone conversations. There’s no excuse for that level of greed on the bank’s part, and I no longer utilize their services.

              • econobiker says:

                @T Axel Jones: You hit the nail on the head. That is the complete problem with the overdraft fees and banks taking the largest debit first to snarf overdraft fees from the next smallest items:

                THIS IS NOT HOW WE WERE TAUGHT TO BALANCE CHECK REGISTERS!!!THIS IS NOT HOW CHECK REGISTERS ARE LAID OUT!!!(me screaming at the world and not T Axel Jones specifically)

              • johnva says:

                @T Axel Jones: But my point stands: they didn’t force you to overdraft. They multiplied the charges, yes, and I think that’s wrong. But they didn’t create the overdraft situation in the first place (the fraudster did). The rest of your comment is a complaint about customer service. You got bad service, but it’s still not true that they “forced you to overdraft”.

                • orlo says:

                  @johnva: Sure they did, since they didn’t decline the card.

                  • johnva says:

                    @orlo: It’s not the bank’s responsibility to ensure that you always have enough money in your account for the things you buy. I don’t really agree with that practice, but it’s still entirely avoidable if you just have enough money in your account.

                    • Eliamias says:

                      @johnva: And to cover anything that a potential thief will take as well? The entire point here is that he did have the money in his account for his purchases. The fraud put him over.

                      Also, in terms of ‘going over’, there was a time that banks prevented you from doing just that. Credit cards and ATM cards used to be rejected for insufficient funds. They have set it up purposely to garner as many fees as possible. While this is their right, in a way, they also prevent you from opting out of this scheme, forcing you to be on the hook for all sorts of fees, even in the instance of fraud. How can you consider them not culpable for that?

  9. pecan 3.14159265 says:

    I don’t think banks would pay attention to this, and I don’t think banks particularly care what anyone wants. Overdrafts, for the most part, are unfair. But how hard is it for someone to take responsibility of making a mistake? You overdrafted? Sorry about that, but did you forget to carry a number when you were balancing a checkbook, or did you forget about that bill that hasn’t deducted from your account? Overdraft fees do suck, yes. But there’s also personal responsibility, and a lesson to be learned.

    Try to get them taken off, but also learn from your mistakes.

    • MonkeySwitch says:

      @pecan 3.14159265: You are missing the point. I am a responsible person. I also juggle low paying jobs and school. My budget is tight and I for the most part do a good job of keeping up with it, but I often balance my account down to a few dollars. Mistakes are going to happen, yes, but I shouldn’t be punished at the profit of these huge banks. They advertise this as a $35 “convenience” fee when there is no convenience charging me $37 for that soda I bought. If you max out your credit card, you don’t magically get more money you get DECLINED. This should be standard for debit cards as well. It’s not that they can’t do it – they just won’t.

      • h3llc4t, breaker of office dress codes says:

        @MonkeySwitch: If the fees are that devastating and you are forced to balance your checkbook down to just a few dollars’ leeway, why not use cash instead?

  10. opsomath says:

    Yeah, I too would feel a lot more sympathy if, say, he had sued over fees that he didn’t deliberately incur.

    • Jabberkaty says:

      @opsomath: How come? Just curious. A fee is a fee. He was working on a controlled experiment to illustrate a point. Whether deliberate or not the point was to show the excessive fees. He did, and then went on to show how to resolve the issue.

      I guess I just don’t see how you would be able to document such a thing without some kind of forethought.

  11. sowellfan says:

    OK – so he opens a bank account, knowing *perfectly well* their overdraft policies, and then intentionally overdrafts, and tries to make it sound like *they’re* the ones being unreasonable? Overdraft fees aren’t generally, to my knowledge, related to the actual amount that you overdraft. The guy was trying to make everything appear ridiculous, so he overdrafter by a dollar – but the fee he was charged, and the paperwork that the bank would have to do- would have been the same if he’d overdrafted by $3000. I’m pretty sure that the cost to the bank to process the overdraft is significantly lower than the actual overdraft charge, but honestly, if overdraft charges weren’t punitive, people would do it a lot more.

    • hypochondriac says:

      @sowellfan:

      What he did was wrong

      What he should have done is show how some banks rearrange the charges to maximize the overdrafts. There was a post on consumerist where a person made 5 purchases he had enough money for the first 4, but the 5th was a few dollars more then the total balance. The bank first debited the 5th charge then the first 4 resulting in 4 overdrafts ranter then just 1.

      • sowellfan says:

        @hypochondriac:
        I absolutely agree – if a bank re-arranges deposits and withdrawals so that the customer incurs fees, then the people that run that bank need to be publically whipped, and locked out of financial work.

        Unfortunately, this guy apparently wanted to take to take the course of cheap tactics and whining.

      • econobiker says:

        @hypochondriac: I think that he did show that a $23 dollar charge bounced some less than $1 charges…

    • T Axel Jones says:

      @sowellfan:
      And they wouldn’t do it at all if the purchase was declined. Overdraft fees aren’t meant to teach a lesson, they are meant to raise revenue. It is pure greed, banks only do it because they can and because consumers are given little meaningful option.

      • Costner says:

        @T Axel Jones:

        I’m not sure you understand the true reason behind overdraft fees. They are not a profit machine contrary to popular belief. In fact, a bank would prefer not to even have customer accounts that have such low balances, because small balance accounts aren’t profitable (banks make money on loans, which require money, and when someone keeps $32 in their checking account, there isn’t enough money to loan).

        Second, overdraft fees are used to minimize risk to the bank. If someone charges $1000 over their limit and then closes the account and never looks back, the bank is out $1000. Yes they can go after that person, but in many cases the cost of litigation is greater than the loss, so they just write it off.

        Therefore, when they collect an overdraft fee, it is offsetting their losses and minimizing their risk. In the modern world it would be easy to deny any charge from a debit card once the balance hits zero, but people can and still do use checks, so overdraft fees continue to be an issue.

        In this particular case, this guy is being an ass. He knew what he was doing and used it merely for personal gain. Frankly Wells Fargo should sue him for fraud and for failure to fulfill his end of the customer agreement that he would have had to agree to in order to get the account in the first place.

        My view – if you don’t like the fees bank or credit card company charges, then don’t use the account or credit card. This isn’t rocket science and no bank on the planet is going to be able to protect people from their own stupidity.

  12. vastrightwing says:

    I recently closed my $5/mo. (in fees) savings account after my bank (Citizens/RBS) refused to rebate any of my fees. The money is now safer in my cookie jar and less prone to theft.

  13. NeverLetMeDown says:

    To turn this situation around, would it be fair or appropriate if the bank just said “we took $100 from your account, no reason, we just wanted it,” and then told you “go ahead and sue us to get it back, if you want, but it’ll cost you $500 to get the money back.”

    This is an abuse of the legal system, pure and simple.

    • JGKojak says:

      @NeverLetMeDown:
      No its not an abuse of the legal system– its a legitimate social action. By your reckoning, I guess Rosa Parks knew she was gonna cause trouble and she shoulda just sat in the back like she was told?

      • NeverLetMeDown says:

        @JGKojak:

        1. That comparison is so spurious it’s offensive. If you really believe that there’s any similarity between a scenario where a company’s prices are too high and one in which a group of people are suffering gross oppression on the basis of their race, you’re either insane or have no moral compass whatsoever.

        2. If you wanted to make an analogy, this would be similar to a lunch counter sit in, except one where the sitters demanded that food prices be cut in half, and where the store’s only recourse would be to spend money on private security guards to throw them out.

        It’s extortion, pure and simple. If he didn’t like the bank’s prices, nothing prevented him from not banking there.

      • Costner says:

        @JGKojak:

        The legal system is designed to enforce or challenge laws, not for “social action”. Had Wells Fargo been willing to send someone to court to defend themselves, they would have won, but it isn’t exactly worth paying their legal team to go to some court house to defend themselves for the few hundred of dollars of potential revenue.

        So yes… it was an abuse of the legal system. His goal wasn’t justice, it was recognition. What an ass.

  14. vastrightwing says:

    Here is a bank’s SOP: offer a “free” savings account with only a $250 minimum balance. Wait until you have millions of accounts that have balances less than $500, then change the terms of service so that you bill each account $5 per month! BAM! Instant money! No work and a few complaints. Millions of dollars each month of theft. Repeat as often as desired.

  15. Sam Wille says:

    After all the horror stories I read here and some of the poor experiences I’ve had, I’ve gone to cash / credit only. I am in a position where I can pay my mortgage in cash – I do so every other week to take advantage of paying off early and staying ahead. I am currently one month ahead on my payments and plan to stay this way. I also pay for our child care, groceries and other incidentals with cash only.

    Everything else is credit that isn’t on some sort of immediate bank transfer – then those amounts are paid off immediately with the funds remaining in the bank. National City’s record now more closely matches my own personal records. I just keep a sheet with my own detail and another with their re-ordered information. At the end I confirm they come out the same.

    Am I tempted to take National City to small claims after seeing this? You better believe it. I would love to see some of my money back from this summer.

  16. esp13 has a pony named Steve says:

    Wells Fargo is currently being sued for high-to-low reordering and debiting a charge, removing it then re-debiting it under a class action suit. For 5 years I didn’t know about the reordering scheme. I think I’m gonna look into the small claims route.

  17. cosby says:

    These people act like the banks are going to call to say hey you are going over your limit. If anything they will just let your stuff bounce or get rejected. What happens when you just had lunch and the card doesn’t clear? Or better yet maybe a mortgage check bounces because you didn’t watch your spending?

    These same idiots will be bitching that the bank didn’t let it clear because they are good customers.

    If more people start doing this banks will either start forcing mandatory binding arbitration or will start showing up and then asking the court for expenses when they win.

    • dragonvpm says:

      @cosby: Oh please, the banks are doing this to make money, pure and simple. People won’t be complaining that their checks or debits didn’t clear if the banks were required to spell out what the options were (i.e. overdraft protection A, overdraft protection B, or no overdraft protection) when people signed up for their accounts. Except that then they couldn’t automatically enroll you in the plan with the highest fees.

      Heck, they could EASILY let you know that you’re going over your limit via txt message or email. Or they could encourage people to check their accounts prior to using them if they might be running low on $$ (kind of how cell phone companies let you check your account balance multiple ways, w/o too much hassle).

  18. Anonymous says:

    Sorry to nitpick, but this particular nit is rampant all over this site in both editorial items and comments. Can we PLEASE stop using “overdraft” incorrectly? Your account isn’t “overdrafted,” it’s “overdrawn.” You don’t “overdraft” your account, you “overdraw” it. When you overdraw your account, it is overdrawn, and you then pay an overdraft fee on the overdraft.

  19. GreatCaesarsGhost says:

    Small claims court gives individuals an unfair advantage over big companies. This is great because companies are constantly screwing the little guy and most methods of recourse (customer “service,” binding arbitration, class-action suits, etc) are of little help. But when the company does nothing wrong (and WF did nothing wrong here), taking them to small claims court is abusing the system. Again, this is no worse than what the companies are usually doing, but it’s hypocritical to call them evil while advocate action like this. And as for “the banks would either try to abolish the small claims court or improve their performance” I think we all know which of these will happen first.

  20. retailriter says:

    I understand the bank charging an overdraft fee for a bounced check, especially if they cover the check rather than returning it. But why on earth does their system allow people to continue to use their debit cards, even if the balance in their accounts is gone? Why isn’t the card just “blocked” once the user has exceeded their balance? My teenager, who just started working part-time, was trying very hard to keep a running balance, but slipped up and was hit with $180.00 in fees from Wachovia. We were able to get a portion of the fees refunded, but I had to laugh when the bank officer said they allow the “overdrafts” as a FAVOR to the customer. Gee, thanks!

  21. chrisjames says:

    “If a million consumers filed a million small claims court actions a year against the banks, the banks would either try to abolish the small claims court or improve their performance.”

    No. Banks would refund the overdraft fees and then refuse to pay the court filing fees, leaving millions of consumers out of a lot of money.

    Please don’t advocate gaming the legal system Mr. Hatch. If you have a real issue, take it up first with the bank, then consult a lawyer* about your options for small claims.

    *A free consultation! We shouldn’t advocate lawyers fleecing consumers to inform them of their rights, either.

    • Anonymous says:

      Small claims judgments–which would be entered if either the claimant prevailed on the merits or the bank did not appear and a default judgment entered–would include court filing fees. Most states also allow for statutory interest on an unpaid judgment as well.

      As for a consultation with a lawyer somehow fleecing consumers, lawyers charge by the hour. My time is as valuable as your time. If you want to talk to me, you pay my hourly fee. You do not need a lawyer to become “informed of your rights”, particularly in the age of the internet.

    • orlo says:

      @chrisjames: Even if they weren’t forced to pay the court fees, they still would quickly find the hassle of dealing with millions of claims not worth it, since they’d no longer be collecting overdraft fees. Talking to the drones at a bank isn’t going to do anything. It will take collective action or legislation to force banks into allowing customers to opt out of overdraft “protection”.

  22. Neverthoughtyoud says:

    Last week, Bank of America allowed someone to take $19.99 out of a checking account with $0.00 in it.

    I recently brought one of my Bank of America checking accounts to $0.00 in preparation of closing the account because I don’t use it anymore. It had been about $30 in the negative for about 2 months because of some other BS charges for a $5 item. I didnt have time that day to close the account because lines to see a non-teller were too long. So I put it off (family friend died and i procrastinated).

    Fast forward a week later the balance on that account was -$54.99. They allowed a $19.99 charge to go thru on an account with NOTHING in it. It wasn’t like there juuuust wasn’t enough to cover the charge so they made an exception, the account was EMPTY.

    So I called the ever so helpful [insert sarcasm] customer service number and asked why they would allow charges to an account which had been at zero for two weeks. It wasnt like this was a surprise payment for something. I don’t use the account, there were no residual charges coming thru that posted after i cleared the account… it was 2-3 weeks later. She informed me that they sometimes pay things that go over as a courtesy. I told her that I had not ASKED for this courtesy, and would like to have that feature removed from my accounts. She said there was nothing she could do. Thats how it was and there wasn’t anything she could do about the charge to the account OR the $35 overdraft fee; in her words “The $19.99 was already paid, theres nothing I can do about the overdraft charge.”

    She asked if Id like to file a claim, and i said yes. I was transfered to a nicer lady in the claims dept. There i found out that the charge was from a gym membership which i havn’t used in almost a year, but neglected to cancel. They have been periodically taking money out of this account any time it goes into the positive. I recognized that I was at fault for not canceling the membership and the closing account, but I can’t understand why they would allow them to take money out of a zero account. Im not a math wiz but I’ve always understood 0 to mean zero, nada, nothing.

    She said she would take the overdraft charge off, and while on the phone with her I transfered $19.99 in to bring the account back to zero. I asked and was transfer back to cust serv to cancel that account.

    I was at fault for not closing the account when i should have. I guess long gone are the days of banks only covering for whats IN the account. They want their money and theyll get it any way they can.

  23. jswilson64 says:

    I don’t see how the judge didn’t throw this out. You shouldn’t be able to get a default judgment just because the respondents don’t show up to defend themselves.

    Doesn’t the case have to have some merit? The guy purposefully overdrafted his account – the only way he should get the fees back is if he could prove he didn’t actually overdraft his account.

    • esp13 has a pony named Steve says:

      @jswilson64: Regardless of whether Mr. Hatch’s case had any merit has no merit in your point. If the defendant doesn’t show to prove his innocence, default judgement. If the plaintiff doesn’t show to prove his case… case dismissed. Had WF shown up, he would have had to prove that he wasn’t responsible for the fees and would have surely lost.

  24. RandomHookup says:

    If he had shown the looting that occurs when the bank decides the order of clearing charges (biggest one first, meaning the greatest likelihood of overdraft charges) and of adding in deposits (after the charges have come out, rather than before), he would have created a more sympathetic story.

    Maybe depositing $100 and charging $101 while depositing a $2 check at the end of the day would have been more interesting.

  25. oneliketadow says:

    I don’t get this case. He had $1 in his account, he tried to buy more than $1 worth of goods, the bank is in the right for charging the fees.

  26. Esquire99 says:

    The guy didn’t “win” here, Wells Fargo simply paid him a nuisance fee to go away. Unfortunately, when literally frivolous suits like this are filed it raises the costs for everyone. The money Wells Fargo paid for the filing fee has to come from somewhere; while the amount was small, a bunch of them add up. As was stated above, this is a CLEAR abuse of the small claims process, and undermines the legitimacy of the entire system. The court system should be reserved for people with legitimate problems, not ones they created just so they could sue. Had he sued over the original overdraft fees he felt were improper, I don’t think anyone would have a problem with it. However, suing over overdraft fees you intentionally created is just absurd.

  27. Skaperen says:

    Overdraft fees should be limited to what the actual costs are.

    Actual costs can include sending notifications to the account holder. So how much does it cost to have a computer print a letter in the already existing systems the bank has for printing letters on those “tear the perf edges off” forms and mailing them? Probably no more than it costs to send customers some of those offers they mail separately every month.

    Maybe what the banks should do for customers that overdraft is send them a dozen offers for various products.

    Actual costs can also include the interest on the amount now effectively on loan. But that’s not really a whole lot for $1.00 times the many such charges made.

    Banks should also allow customers to specify a “hard limit” on overdraft, where any charge forcing the account negative will be refused. And what is the cost of refusing?

    We need a law … that forces genuine and true costs be the basis for all charges, plus a reasonable profit margin of not more than 15% (and that’s generous) be added on.

  28. NeverLetMeDown says:

    At the core, these overdraft fees are like credit card rewards and credit card interest.

    On the credit card side, one customer’s rewards are being paid for by another customer’s interest payments. If customers paid less in interest, the rewards programs would be scaled back too. It’s a transfer between customers, net/net.

    By the same token, if banks made less money on overdrafts, they’d make it up somewhere else, which basically means monthly fees. So, the overdrafters are subsidizing the non-overdrafters.

  29. Travis Estell says:

    I think people are missing the point of what Mr. Hatch did. The biggest point is that banks will not put up much of a fight, and will simply refund overdraft fees because it’s cheaper than going to court. The fact that he intentionally overdrafted his account is secondary — and obvious, since this whole thing was an experiment.

    • Travis Estell says:

      To clarify — He didn’t ask them to refund the fees because they were unfair. He asked them to refund the fees to prove that they would refund them, even when they were clearly his fault, because it was the easiest option for the bank.

  30. grapedog says:

    wow, the outrage at the abuse of our legal system is palpable.

    I’m glad the guy did what he did…more people should too. Obviously there are not enough smart people in this country to vote out the two party system and actually get some fresh blood into our government…so, we need rebels and criminals to start doing the right thing when the regular working class people are too meek to do it.

  31. Ed Chan says:

    Why didn’t Wells exercise their mandatory binding arbitration clause on this guy? I would have expected that at least from this bank!

  32. Shrew2u says:

    It’s really unfortunate that this guy intentionally committed fraud in order to make his documentary. While I applaud the premise (banks should provide consumers with the option to have a charge denied for insufficient funds), the execution leaves me hoping Wells Fargo gives him a bit of comeuppance.

    @RandomHookup: I like your idea so much better – ethically sound while still making the point that needs to be made. I might tweak it, though – open the account with $90, deposit a $10 check on a Friday afternoon, THEN spend $95 and $4 over the weekend, so there is no wiggle room about the logical processing order of the transactions.

  33. Anonymous says:

    These are NOT bounced checks! He did NOT open the account to intentionally bounce checks.

    He opened the account to receive a debit card and attempt to use it. THE BANK allowed several purchases to be made via debit while the account had just one dollar… THE BANK allowed these debit purchases, even though the account was empty, because they wanted to CHARGE him $28 per purchase. And you can bet he did not ask for this capability when opening the account, they just added knowing the charges that could be raked up.

    Most of the morons posting here sound like reps of the bank. But, I think they are just people SO used to getting ripped off and brainwashed to take the blame, that they take the side of the Corp by DEFAULT!

    So sad…. But as long as you stay programed to accept the blame for the thieving that large Corps do to the little people, you will continue to get robbed.

  34. Xero says:

    Some of you are actually hoping for a Wells Fargo counter suit because he intentionally did it? SERIOUSLY!? It was to show that there is some hope for the little guy and to prove a point, not to break the law. But perhaps you have never heard of a single important person throughout history who has ‘broken a law’ to better the world? Just because a company says it CAN do something doesn’t make it right.

    • sowellfan says:

      @Xero_Azmea:
      This schmuck hasn’t bettered the world in any way, shape or form. He’s a pretentious jerk who just wanted to stick it to “the man” – without regard to the fact that when he signed up for the bank account, he contractually agreed to the fee schedules for overdrafts.

      This brings to mind a question – why wouldn’t a person just sign up for overdraft protection? I’ve got it through my credit union, and it’s quite handy.

      • orlo says:

        @sowellfan: You’re clearly on the wrong website. This man is a genius. Every bank is now in a predatory pursuit of fees from customers, and in a beautiful jujitsu move Hatch used the bank’s weight against itself, demonstrating that NO ONE SHOULD EVER PAY overdraft charges.

        • bonzombiekitty says:

          @orlo: I disagree. You agreed to being subject to the charges when you signed up for the account. I have no sympathy for you if you’re charged a fee that’s clearly spelled out in your agreement with the bank.

          Granted, I think it’s slimy when banks order withdrawals and deposits in such a way that it maximizes the fees. But still the whole idea of “nobody should ever pay an overdraft fee” is silly when they agreed to it.

          Don’t want to potentially be held liable for an overdraft fee? DON’T AGREE TO BE SUBJECT TO THEM. Use a different bank. There’s more than one bank out there.

  35. JoshReflek says:

    i liked that vid, that guy sounded honest and wasnt full of himself when he ‘won’ the settlement.

  36. frustated2dMAX says:

    We definitely need more consumers like Karney who puts his energy to good use by helping others like us. For those of you who didn’t understand the point of his documentary I would like to say that it’s pretty simple: he was “robbed” by the bank, then he just tried to “test” the bank system fairness by doing what he did. He is totally right in doing so. I was just an
    “experiment” since he probably would never get a refund for the real overdraft fees he was charged previously. These banks are getting away with murder. If they were to at least respect the customers as such, things would be better for both sides. Unfortunately all the financial institutions see nowadays are dollar signs and ways to bleed the poor and ignorant ones. I hope this will change. I’m glad I’m able to be part of the informed ones now. Thanks Karney & the Consumerist: keep up the good work!