Wells Fargo Customer Explains How $500 Loan Resulted In $3,000 In Fees

[UglyGreed]

Meet the new loan sharks. I remember at one time it was considered illegal to charge over 21% interest...... my how our country has changed in my lifetime.


http://consumerist.com/2013/07/26/wells-fargo-customer-explains-how-500-loan-resulted-in-3000-in-fees/

[Liberal_in_LA]

1. detail from the article, wells fargo basically operating like a payday loan operation

So when her truck needed some repairs back in 2007, she went to Wells Fargo, where she’d had an account for years, hoping to get a personal loan for a few hundred dollars. The bank said it didn’t offer personal loans for that amount, but she could get a Direct Deposit Advance loan for up to $500.
How it works is that Wells fronts the borrower the money, but the next time sufficient funds are direct-deposited the borrower’s account, Wells takes the money out of the customer’s checking account, along with a fee.
The woman had her $500 that day and when her next Social Security check was direct-deposited later that month, Wells took out the $500 loan amount plus a $50 fee.
“The $550 that Wells Fargo took was half of my monthly income,” she testified. “Without it, I couldn’t pay my rent and other expenses.”
And so, as is a common problem with these sorts of short-term loans, the borrower must take out another loan once the first one is repaid. In this case, the borrower had money to repay the loan amount and fee each time, but was not left with sufficient funds to make it through the month.
“A few times I tried to not take out another advance, but to do that I had to let other bills go,” she explained to the Senators. “I never made it two full months without having to borrow after paying the last advance.”
She says that were months were she borrowed less than the $500 maximum, sometimes as little as $200, “but I still couldn’t stretch my Social Security check to pay the whole advance and make ends meet.”

[UglyGreed]

4. Yes indeed.

and imagine if this poor women did not have Social Security.

[chillfactor]

2. does not surprise me one bit......

I took a $500 advance loan from Wells Fargo as well......instead of taking the advance loan out of my SSI check......they completelty wiped put my first paycheck to collect the advance loan amount and left me overdrawn to boot....I have 7 medications waiting for me at the drug store including three that keep my heart functioning and beating, i need gas to get to work for my new job that I will lose because I do not have the gas money to get here, and I need groceries....all which would have been taken care of with my first paycheck..the bank could care less..I could die without my medications and Wells Fargo would care less......

if I am still alive to do it...I will close my account at Wells Fargo which I have had for 20 years and switch to a credit union......Wellls Fargo is a soulless, heartless asshat bank.....

[UglyGreed]

5. People need to

hurt these too big to fail banks and start using credit unions and such. I wish you the best and try to stay strong I hate to hear of people who struggle because of health issues and instead of receiving support and some empathy from their fellow Americans most must continue suffer alone.

[Politicalboi]

3. I'm not a fan of banks but

I just had the state of Ca put a lien on my Wells Fargo checking account. That put me 125.00 in the negative. Wells didn't charge me $35.00 a day for overdraft fees. And I use the direct deposit in my mothers account. Wells charges $1.50 for every $20.00 you borrow. I feel that is worth it if it's that important. Right now, I am on that merry go round with borrowing and paying back. It can be tough, but I feel Wells is really not to blame here. A buck 50 is not a lot of money to spend for a small loan.

I feel for this lady, I know what it's like. But Wells does warn you about how many withdrawals you have already made, and that using this option is not a real good idea.

[chillfactor]

6. for some of us it is really the only option....

I do know I will never do it again.....Wells Fargo could care less if I live or die.....and they could have gotten their money by waiting for my SSI check.....