Wells Fargo Merchant Services Sued Over Credit Card Fees
Two small businesses, Patti’s Pitas and Queen City Tours, have sued Wells Fargo Merchant Services. The class action suit alleges that Wells Fargo and its payment processor, First Data Corp, promised transparent pricing for their credit card processing services but actually charged unauthorized fees, which Wells Fargo disguised using deceptive language in monthly statements.
While only two businesses are involved in the case, the lawsuit says that hundreds of thousands of merchants were likely affected by Wells Fargo’s practices.
Wells Fargo spokeswoman Sara Hassell told The New York Times “We deny the claims and plan to defend against the misrepresentations outlined in the lawsuit.”
The lawsuit alleges that Wells Fargo buried important details about fees in a 63-page contract, which merchants would not have time to read or understand completely. The suit further states that this three-year contract, which could be terminated only by paying a $500 fee, set out a number of unanticipated fees, including a $35 monthly minimum charge.
The plaintiffs claim these fees were described as “interchange charges,” which would indicate they came from the credit card network. However, the lawsuit claims these fees were actually kept as profit by Wells Fargo.
This suit is just the latest in a long line of legal woes for Wells Fargo. Last week, the bank was sued by customers who allege they were charged for auto insurance through the bank, even if they had their own coverage. Wells Fargo is also in the midst of settling a class action lawsuit over claims they illegally opened accounts in customers’ names. They have already paid the Consumer Financial Protection Bureau $180 million over this alleged practice.