[8/14/17] Wells Fargo has already admitted to charging people for overdrawing bank accounts that they didn’t have and for car insurance that they didn’t need. Now, it’s being accused of ripping off vulnerable mom-and-pop businesses.
For several years, Wells Fargo’s merchant services division overcharged small businesses for processing credit card transactions, a lawsuit alleges. Business owners who tried to leave Wells Fargo were charged “massive early termination fees,” according to the lawsuit filed in US District Court.
The “overbilling scheme” targeted less sophisticated businesses by using “deceptive language” in a 63-page contract designed to confuse them, the lawsuit filed on August 4 claims. The lawyer filed court documents to seek class action status.
The latest controversy centers on Wells Fargo Merchant Services, a joint venture that is 60% owned by Wells Fargo and 40% controlled by First Data ().
A former employee of the Wells Fargo () business told CNNMoney that he was instructed to target these small businesses.
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“We used to be told to go out and club the baby seals: mom-pop-shops that had no legal support,” he said in an interview. The former Wells Fargo employee spoke on the condition of anonymity, but CNNMoney verified that he worked for Wells Fargo Merchant Services.