Trouble for Wells Fargo again as they are accused of ripping off small businesses

Banking giant Wells Fargo is in hot water again after being accused of ripping off vulnerable mom-and-pop businesses. A new lawsuit has alleged that for several years, WF’s merchant services division overcharged small businesses for processing credit card transactions. If business owners tried to leave Wells Fargo they were then charged massive early termination fees.

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The suit filed in US District Court on August 4th says the overbilling scheme “targeted less sophisticated businesses by using ‘deceptive language’ in a 63-page contract designed to confuse them.”¹

A verified former employee of Wells Fargo business told CNNMoney he was instructed to target these types of small businesses, “We used to be told to go out and club the baby seals: mom-pop-shops that had no legal support.” He went on to say it was almost impossible for business owners to leave the merchant agreement, “God would have had a hard time. It really was like a shady used car deal.”¹

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One plaintiff from North Carolina, says Wells Fargo charged their business monthly fees of $20 to $35 for not having a minimum number of transactions even though the contract said there would be no such fees. And a second plaintiff, the Pennsylvania restaurant Patti’s Pitas, “claims it was ‘pounded by excessive fees’ — even after it went out of business in May 2017.”¹ When Patti’s Pitas tried to leave the contract, WF told them they couldn’t because their contract was for three years, something the owner wasn’t aware of.

For their part, Wells Fargo denies the claims and plans to defend themselves against what they no doubt see as unfair treatment. (How are people STILL banking with this company?)

Though Wells Fargo has tried to change the culture that exists there, they have a long way to go. Just last month they revealed that they had charged as many as 570,000 customers for car insurance they didn’t need and around 20,000 of those customers might have had their vehicles repossessed because of those unnecessary insurance costs.¹