Supreme Court upholds verdict against Wells Fargo on overdraft fees in California

The Supreme Court on Monday let stand a $203 million verdict in favor of Californians who were repeatedly charged overdraft fees by Wells Fargo Bank a decade ago.

The justices turned down the bank’s final appeal, in which Wells Fargo contended the class-action verdict was not justified.

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Lawyers sued on behalf of Wells Fargo customers who used a debit card and said they were misled by the bank’s policy on overdrafts.

A federal judge in San Francisco ruled in 2010 that Wells Fargo had sought to “maximize the number of overdrafts” by subtracting the highest charges first on the debit card, followed by the lower charges. When the account was overdrawn, this so-called “high to low” policy had the effect of multiplying the number of overdrafts, each of which carried a $25 to $35 fee.

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The judge said the bank had deceived its customers in violation of California’s consumer protection law, and he awarded $203 million in restitution to those who were charged for overdrafts between 2004 and 2008.

Since then, lawyers for Wells Fargo have been appealing in the federal courts, including twice to the 9th Circuit Court of Appeals.

In its appeal to the Supreme Court, the bank argued there was no proof that the debit card users had ever read or relied upon the bank’s written policies, which were found to be deceptive. In upholding the verdict, the 9th Circuit said the California law protects consumers who have been hurt by a company’s deception, regardless of whether they read its disclosures.

The justices on Monday said they would not hear the appeal in Wells Fargo vs. Gutierrez.

On Twitter: @DavidGSavage

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