Give Wells Fargo so much credit: The bank continues to devise ingenious ways to cheat customers.

In recent years, we’ve seen Wells sign millions of people into accounts they didn’t want, inappropriately take back service employees’ cars, and charge customers for insurance they didn’t ask for, resulting in billions of dollars in fines.

Now there is this.

Rick Yelinek, 68, had finally collected enough money to pay off the mortgage on his Eagle Rock home. He stopped at a Wells Fargo branch in Glendale with a check and deposited it into the checking account used for his Wells Fargo home loan.

First, Yelinek was told he would have to wait a few days for the check to be settled, which he expected, even if it meant Wells could add more interest to his loan, which it did.

However, after the check was settled, the bank lived up to its reputation for unfriendly customer service.

Yelinek was told he would have to pay an additional $30 for a wire transfer to move his mortgage payment from one department of the bank to another.

“I was incredulous,” he told me. “I couldn’t believe what they were saying.”

Yelinek pointed out to the Wells employee who managed his account that he had been a customer in good standing for many years and asked for a waiver of the $30 fee.

“They said they never waive transfer fees,” he recalls.

Yelinek then filed a complaint with the bank about his treatment. That was in August. “I’m still waiting for an answer,” he said this week.

The episode is noteworthy on several levels, not least that if a bank needs to manage any reputational damage by treating people fairly, it’s Wells Fargo.

Then there’s this: Yelinek is a 35-year veteran of the banking industry, including seven years at Wells Fargo as a loan officer. It’s fair to say he knows the trade.

And he is unimpressed by the behavior of his former employer.

“This is quintessential Wells Fargo,” Yelinek said. “The bank is so fee-based, they will do anything they can to get money from customers.”

Wells may be particularly fee-focused, but it’s certainly not alone.

Since deregulation in the 1980s, the entire banking industry has become more reliant on reaching people’s pockets with expense allowances, as opposed to the traditional focus on lending rates.

We’re talking overdrafts, wire transfer fees, credit card fees, underfunding fees, ATMs, and other fees that over the years have played an increasingly important role in keeping banks’ profit-hungry shareholders happy.

The Federal Reserve Bank of Cleveland has found: in a 2019 study that the so-called non-interest income of banks increased by 25% between 2005 and 2018.

The banking sector as a whole took in $12.4 billion last year alone from overdrafts, the vast majority of which were paid by people on lower incomes.

Wells Fargo is therefore not the only one who flexes his customers. But its status as the nation’s largest residential mortgage service provider gives it ample opportunity to exploit this market captive.

In the nine months ending September 30, Wells nearly $4 billion in non-interest-bearing mortgage banking income, including $2.1 billion in “service charges, late charges and ancillary charges.”

This presumably includes those $30 wire transfer fees that infuriated Yelinek.

Wells currently has approximately 6.5 million mortgage loans.

“I wonder how much $30 in fees they’re getting on those mortgage payments,” Yelinek said, echoing my own thoughts.

And that’s the main point in any discussion of fee-based businesses. The outrage isn’t just in the individual fees, though they annoy most consumers enough.

The real outrage is in the volume of fees. Thirty dollars here, $30 there. Soon you are looking at serious money.

Other banks may also charge for internal transfers, but I couldn’t find any of Wells’ standing doing this for mortgage payments. Bank of America isn’t doing it. Neither does the US bank.

“We would do it without the need for a wire transfer,” said Evan Lapiska, a spokesman for the US bank.

Tom Goyda, a spokesman for Wells Fargo, said the bank regretted not responding to Yelinek when he first raised these issues in August. “We are contacting him and plan to refund the transfer fee,” he said.

So Wells is doing waive transfer fees, as it turns out.

Still, the bank didn’t seem to regret imposing the same fee on potentially millions of other mortgage customers (Goyda was unable to provide a specific number).

“We are clearly communicating options for sending payout funds,” he told me. “These options are outlined in the written payout letter and include the option to pay by certified check to avoid wire transfer fees.”

Wait, customers can avoid the wire transfer fees if they use a certified check, but not if they use a cashier’s check? That makes little sense.

The only difference between cashier checks and certified checks is that the former are: debited from the bank’s own account, while these are debited from the customer’s account. In both cases, the issuing bank checks beforehand whether there is enough money.

Goyda said certified checks are written to Wells Fargo, but a cashier’s check can be written to the holder of the mortgage account.

That is a distinction without difference. With both types of pre-verified checks, the money was deposited with Wells Fargo for the express purpose of paying off a Wells mortgage.

Most banks charge for: make transfers to other banks, and some charges for receiving them.

As such, Goyda said Wells’s $30 fee for mortgage repayments was justified, although, as in Yelinek’s case, the bank both initiated and received the transfer as the money moved from one part of the company to another.

That’s stupid of course. In fact, Wells argued that if a cashier’s check is used (but not a certified check), they have the right to charge $30 even if it transfers money from itself to itself.

Goyda didn’t respond when I pointed this out. However, he said the bank was “assessing our processes for such transactions” as a result of my inquiries.

Guess what?

Goyda contacted me on Thursday afternoon to say that Wells had suddenly changed his mind.

“We recognize why Mr Yelinek and others in his situation would not be satisfied with paying compensation in these circumstances,” he said.

“We are changing our process so that in the future customers will not be charged this type of fee when transferring money from a Wells Fargo deposit account to pay off a Wells Fargo mortgage.”

That is commendable. However, I still wonder how much money Wells Fargo has already made over the years with this practice.

If I were a banking supervisor, I’d be wondering the same thing. And I wonder if any refund is in order.

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