Wells Fargo Class Action Lawsuit

September 1, 2017

 

Merchants across the country are solicited every day by a merchant services provider, more specifically their banking institution, like SunTrust, Bank of America, TD Bank, Wells Fargo, BB&T, CitiBank... Let's dive into one bank in particular, WellsFargo, and their recent Class Action lawsuit to uncover the sales tactics they use to deceive their own clients. 

In the past few weeks, a group of small business owners filed a call action lawsuit against Wells Fargo Merchant Services (WFMS), which is a joint venture between Wells Fargo Bank and payment processor First Data Corp. This class action suit claims that WFMS participated in misleading sales tactics as well as over billing for their services and charging "massive early termination fees". The lawsuit contends that the 63-page merchant processing contract was designed to confuse small business owners.

 

Per Pymnts.com (a website dedicated to the payments industry)... CNN reported an ex-employee of Wells Fargo was told to target less sophisticated small businesses. "We used to be told to go out and club baby seals: mom [and] pop shops that had no legal support," the unnamed employee told CNN. He said during his employment from 2011-2013, it was nearly impossible for business owners to get out of their merchant agreement.

 

One of the plaintiffs claim they were "pounded by excessive fees" after closing their account in May of 2017. Another plaintiff in the lawsuit said it was hit with a $500 early termination fee for breaking their contract, and also alleges WFMS was charging them $20-$35 per month for not hitting certain processing volumes.

 

As a long time payment professional, these practices only scratch the surface of what payment processors do to small business owners across the country. This is evident in a recent class action suit against payment processor Mercury Payment Systems (now Vantiv Integrated Payments) who was sued by another payment processor, Heartland Payment Systems, for false billing practices.

 

In this lawsuit, Heartland claimed that Mercury was inflating Interchange, which are the fixed fees that a business pays to Visa, MC, Amex and Discover. Mercury was purposefully adding either a percentage or additional pennies to the 300+ levels of the Interchange tiers.

 

Mercury has since settled this lawsuit for $30+ million in exchange for the lawsuit to be quieted and go away. Mercury has NOT changed their billing practices to this day and is continuing to steal samll business owner's profits

 

Be aware the next time you are solicited for you merchant account. The best advice from me is to ask a lot of questions, mainly about the sales rep, their company and a who their clients are in your area.  

 

 

Share on Facebook
Share on Twitter
Please reload

Featured Posts

More junk fees coming

October 26, 2017

1/1
Please reload

Recent Posts

October 26, 2017

October 21, 2017

Please reload

Archive
Please reload

Search By Tags
Please reload

Follow Us
  • Facebook Basic Square
  • Twitter Basic Square
  • Google+ Social Icon