Wells Fargo & Co. must pay customers $203 million for manipulating debit-card transactions to boost overdraft fees, a federal appeals court in San Francisco held, upholding a lower-court ruling.
A three-judge panel said Wednesday that the case is replete with examples of false and misleading statements about posting debit transactions and overdraft charges, justifying a federal judge’s decision last year to reinstate the restitution he awarded in 2010.
Wells Fargo, the largest U.S. home lender, changed the way it treated customers’ daily debit transactions and cash withdrawals in December 2001, posting those with the highest dollar amount first rather than in the order they occurred, customers said in a 2007 lawsuit.
The practice resulted in more overdrafts, with customers overdrawing their accounts by small amounts multiple times a day, according to the complaint. The bank ended the practice in 2011.
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U.S. District Judge William Alsup in San Francisco said last year that the bank misrepresented the posting order and overdraft charges and must restore the fees to customers. His original 2010 restitution order was overturned by the panel, which sent the case back to him to redo the damages.
Alsup awarded the same amount of money, saying the deceitful practice was proved at trial.
“We are disappointed with the court’s ruling, and we are considering our options,” a Wells Fargo spokeswoman, Richele Messick, said by e-mail.