Wells Fargo Class Action Challenges Hidden Finance Fees

Amid a nationwide rebranding campaign, Wells Fargo faces a class action lawsuit alleging that the bank charges unfair hidden fees in its credit card financing program.

Plaintiff John Silverman and J. Edwards Jewelry Distributing LLC recently filed the class action lawsuit against Wells Fargo & Company, Wells Fargo Bank NA, and other related companies, alleging that the bank operates a credit card financing program involving illegal hidden fees.

Silverman is the president and manager of J. Edwards Jewelry Distributing LLC, a jewelry store in Texas. Through his stores, Silverman reportedly offers a “Jewelry Advantage Program” through Wells Fargo.

The program was allegedly marketed to Silverman as a “no interest” financing option that allowed retailers to offer different prices based on the term length of the financing. However, this discount was allegedly kept by Wells Fargo, with Silverman and his stores receiving none of the profit.

Silverman claims that Wells Fargo includes hidden fees in their financing programs and encourages retailers to build those fees into the regular price of goods and services, “while representing to retail consumers that the goods and services that they purchase are being financed at zero percent interest.”

Wells Fargo allegedly charges these fees as sales tax, which should not be added on financial charges, and withholds the money from merchants to create a personal profit.

The Wells Fargo fees class action claims that these actions violate the Truth in Lending Act (TILA). The TILA was enacted in 1968 to regulate lending practices and protect consumers from deceptive lending offers. “The informed use of credit, results from an awareness of the cost thereof by consumers,” Congress decreed upon passing the Act.

Specifically, the TILA requires any financing charge to be disclosed clearly and accurately to the consumer. Banks were allegedly “burying” the cost of credit within the price of goods, which the TILA aimed to prevent. Silverman claims that Wells Fargo’s actions are an example of the deceptive credit practices which TILA aimed to eliminate.

“While a discount for cash payment from the regular price may not be classified as a finance charge, if the regular price is grossed up to capture the costs of financing, such increase is considered a surcharge, and therefore is a finance charge under the TILA,” the Wells Fargo class action states.

Silverman seeks to represent all persons who entered into a dealer agreement with Wells Fargo as part of the following programs: Wells Fargo Jewelry Advantage, Wells Fargo Automotive Advantage, Wells Fargo Health Advantage, Wells Fargo Home Furnishings, Wells Fargo Home Projects.

The Wells Fargo financing class action seeks compensatory damages, statutory damages, treble damages, injunctive relief, disgorgement, restitution, court costs, and attorneys’ fees.

Silverman is represented by Matthew A. Berliner of Fortis LLP; Scot Wilson of Robinson Calganie Inc.; Walt D. Roper of The Roper Firm PC; and Robert A. Skipworth of Robert A. Skipworth, Attorney at Law.

The Wells Fargo Financing Fees Class Action Lawsuit is Silverman, et al. v. Wells Fargo & Company, et al., Case No. 3:18-cv-03886, in the U.S. District Court for the Northern District of California.