Wells Fargo is facing a fresh lawsuit contending the bank’s Merchant Services Unit overcharged small businesses for the payment processing of their credit card transactions.
According to a news report on CNN.com, citing a lawsuit filed in U.S. District Court, Wells Fargo also hit business owners with “massive early termination fees” and targeted business owners who weren’t as savvy, by using “deceptive language.” The lawsuit contends the 63-page contract was designed to confuse them.
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 the baby seals: mom [and] pop shops that had no legal support,” the unnamed employee told CNN. He said during his employment from 2011 to 2013, it was nearly impossible for business owners to get out of their merchant agreement.
Queen City Tours, one of the plaintiffs in the lawsuit, said it was hit with a $500 early termination fee for doing that. It also alleges Wells Fargo Merchant Services Unit charged a $20 to $35 monthly credit card fee for not meeting a certain number of transactions. That comes even with the contract stating there were not credit card fees of that nature. Patti’s Pitas, another plaintiff in the lawsuit, contends it was “pounded by excessive fees” even after closing down in May of 2017.
“We deny these claims and intend to defend against [it],” Wells Fargo said in a statement to CNN. The company said it believes its “negotiated pricing terms are fair and were administered appropriately.” The bank wouldn’t comment on the specific claims the ex-employee made regarding mom and pop establishments, noted the report.
This comes as yet another blow to the beleaguered bank, which recently disclosed it may uncover more cases of fake accounts than previously thought and is facing new allegations in its auto lending unit, which sold customers car insurance they didn’t want or need.