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Wells Fargo settlement overview:
- Who: Wells Fargo has reportedly reached a $35 million settlement with the U.S. Securities and Exchange Commission.
- Why: The company allegedly failed to update its billing accounts to reflect reduced fee agreements it had reached with clients, causing them to be overcharged.
- Where: The Wells Fargo settlement was reached with the SEC.
- What are my options: Credit Karma offers banking options like checking and savings accounts and credit cards.
Wells Fargo has reached a $35 million settlement with the U.S. Securities and Exchange Commission (SEC) over allegations it charged excessive advisory fees, Law360 reports.
The SEC recently issued a cease-and-desist order alleging Wells Fargo and its predecessor firms overcharged nearly 11,000 investment advisory accounts more than $26.9 million in advisory fees from 2002 through 2022.
Between 2002 and 2014, certain Wells Fargo investment advisor representatives reportedly agreed to reduce the standard, pre-set advisory fee rate for certain clients when they agreed to open accounts, according to the SEC.
To document the changes to the typical Wells Fargo advisory fees, the representatives made handwritten or typed notes on the standard agreements but failed to ensure the agreed-upon rate was entered into the billing system when they set up the clients’ accounts.
The SEC says Wells Fargo violated the Advisers Act by failing to implement written compliance policies and procedures that would have prevented this type of overbilling.
Wells Fargo advisory fees refunded to affected accounts in 2022, SEC says
According to the cease-and-desist order, Wells Fargo learned about the Wells Fargo advisory fees issue after the Connecticut Department of Banking submitted an inquiry in 2018. Wells Fargo reportedly confirmed that the accounts at issue had been overcharged and reimbursed the accounts.
Other accounts were subsequently discovered to have been overcharged for Wells Fargo advisory fees, the SEC alleges. Despite knowing of the overcharges in Connecticut, Wells Fargo reportedly failed to conduct periodic testing of its accounts to ensure that the advisory fees were accurate.
Wells Fargo continued to overcharge Connecticut accounts until 2019 when it began identifying discrepancies between its agreements with clients and the information in the company’s billing system, the SEC says. In 2022, Wells Fargo developed a process to identify which agreements contained handwritten or typed notations and discovered 10,800 additional accounts that had been subject to Wells Fargo advisory fee overcharges nationwide.
Wells Fargo subsequently corrected the advisory fees and issued $26.3 million in reimbursements plus $13 million to the affected account holders, the SEC notes.
The Wells Fargo settlement with the SEC requires the company to cease and desist from further Advisers Act violations and pay a $35 million penalty to the SEC.
A recent Wells Fargo class action lawsuit alleges the bank allows fraudulent bank accounts to be created and releases customers’ full banking details to the fraudulent account creators.
What do you think about the Wells Fargo settlement with the SEC? Join the discussion in the comments!
The SEC is represented by Tracy W. Lo and BeLinda I. Mathie.
The Wells Fargo advisory fees lawsuit is In the Matter of Wells Fargo Clearing Services LLC and Wells Fargo Advisors Financial Network LLC, File No. 3-21580, before the Securities and Exchange Commission.
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19 thoughts onWells Fargo to pay $35M to settle claims it wrongfully charged advisory fees
I have overdrawn my account but after I realized that I had overdrawn it I hurry up and put some money in there where they didn’t have to be placed it for me and they charged me money for this overdraft fee that they did not process and it’s not just once it’s more than one time they did this the only thing about this I don’t have any proof not on hand but I’m pretty sure they do
Wells Fargo routinely destroys the lives of employees and customers/clients. They force NDAs on employees who dare challenge their illegal activities. And yet they still run free to commit ever more fraud and atrocities. Go figure.
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Yeah Wells did me dirty I just needed a newer card. They sent me my card but they took my over draft protection …which really they started hitting me hard for over draft fees…that really got me mad I had to change to another bank . And who knows what else they did. I want some copasation back
Wells Fargo in Chicago cleared an improperly endorsed 203k check. The check was a 3-Party Check for $14,600. Two parties signed the check, I was not given the opportunity to endorsed this check. I didn’t know about this check or the so-called contractor who disappeared after cashing the check.
I 2021 I had an account with Wells Fargo. And they took my stimulus money. When they sent us the last $1400. They stole my $1000 and I didn’t owe them anything. No loan with them overdraft nothing. And they never gave it back to me. Even when I filed a complaint against them. They cheated me out of my money they government sent me and it really hurt me. Well’s Fargo are Crooks! They are always getting sued for something.
Wells Fargo has been allowing me to overdraft my account, of course they charge me the $35 dollars for the overdraft withdraw from the ATM of $240 dollars. Now I can’t withdraw $500 or $260 dollars even though the maximum daily limit is $700 dollars, I can get $240 dollars. The ATM Card is returned along with the $240 dollars. I IMMEDIATELY enter my bank card into the ATM a 2nd time and I can withdraw another $240 dollars and a 2nd overdraft fee of $35 dollars, any amount over the $240 is Declined. The card is returned along with the $240. I AGAIN IMMEDIATELY enter my bank card for the 3rd time and withdraw $150 dollars and I’m charged for the 3rd time the $35 dollars for the overdraft. I’m Charged $105 for the 3 overdrafts for the 3 ATM withdrawals for a total of $630 dollars. When I made my 1st withdraw I had tried to make a $600& $500& $300& a $260 dollar withdrawals amount that were ALL Declined, were as it would of been just the one overdraft fee of $35. So Wells Fargo had let me get $630 dollars for $105 dollars for the 3 overdrafts withdrawals that was on the same day and took less than a minute and a half, THEY COULD HAVE AND I FEEL THEY SHOULD HAVE JUST ALLOWED ME TO WITHDRAW THE $630 DOLLARS ON THE 1ST ATM TRANSACTION WITH ONLY THE ONE OVERDRAFT FEE, BUT NO IT COST TWO ADDITIONAL OVERDRAFT FEES PLUS THE 1ST ONE AND THEY GOT AN EXTRA $70 DOLLARS PLUS THE 1ST OVERDRAFT FEE. MY ROOMMATE DIED AND I HAD TO PAY
100% FOR THE BILLS THAT MY ROOMMATE WOULD HAVE PAID. SO I HAD MY BACK UP AGAINST WALL AND HAD NO OTHER OPTIONS AND WELLS FARGO HAS BEEN GETTING THESE MULTIPLE OVERDRAFTS ON THE SAME DAY AND SAME VISIT FROM ME FOR MORE THAN 18 MONTHS. I FEEL IT’S UNETHICAL AND DEFINITELY UNFAIR.
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Please add me Wells Fargo Bank allowed my account to overdraft to now over $800. By allowing charges applied when it was $0 in the account. For the life of me I just can’t understand how you allow bills be applied to your account when there’s no money to pay for the bills. Then had the nerve to send me a letter saying I owe them money, I’ve been with this bank since 2003.
All of these fees i dont like