How A $10 Overdraft Fee Spiraled Into $1,555 In Debt To Wells Fargo

Five years after a NJ man thought he’d closed his former business’s two lines of at Wachovia, he was hit with one heck of a surprise by the bank’s new owner Wells Fargo: He had somehow racked up more than $1,500 on one of those accounts, without ever having received a statement.

In 2006, the man shut down the bike shop he’d owned for 14 years. He tells the Newark Star-Ledger’s Bamboozled column he paid off the two lines of credit associated with the business and thought he’d had both those accounts closed.

He did leave the shop’s checking account open to pay off any remaining bills for the business.

So what he believes happened is this: Some bills were set up for monthly auto-pay from the checking account. But when that account got down to zero, rather than have that payment bounce, the bank paid it out of one of the credit lines that he’d been led to believe were closed, and hit him with a $10 overdraft fee.

That was back in 2007, and the man says he received no statements from Wachovia or Wells Fargo until this past December. That’s when Wells Fargo wrote to let him know that his line of credit was being closed for lack of payment and that he would be reported to the credit bureaus in March if the debt was not resolved.

“Wells Fargo was essentially using my line of credit to pay themselves for charging me fees for five years without my knowledge,” says the man.

He showed Bamboozled documents showing payments in 2006 that should have closed those credit lines. However, he admitted he could only find written proof that one of the two credit accounts had been closed.

The bank said it had attempted to send statements to the bike shop address but the last statement was sent in Dec. 2007. The man offered to pay the fees for the months during which the bank was sending statement, but Wells wouldn’t go for that.

After Bamboozled got involved, the bank decided to waive the $1,555 in fees, but let this be a reminder to anyone who closes a bank account or line of credit: Be sure to get — and keep — documentation showing that your account is no longer active.

Bamboozled: Customer seeks help with a closed Wells Fargo account, opened again []

Thanks to Alexa for the tip!