Very Disappointed In Wells Fargo
An open letter to Wells Fargo and anyone else who cares:
Dear Wells Fargo,
I have been banking with you for six years. My husband has been with you since the mid-90s. When we bought our house and consolidated our finances, we decided to merge my bank accounts with his and move everything to your bank (in hindsight, I wish we had moved him to my bank instead, but you know what they say about hindsight). We added my name to his checking account, and opened a joint credit card through Wells Fargo. Our Heloc is also through your bank, and has been ever since we bought our house. Three years ago, we incorporated our business and opened a business checking account, along with a corporate credit card for each of us. Last month we opened a corporate money market savings account.
Our high-yield savings account is not with Wells Fargo, because as far as I know you do not offer one. And our HSA and IRAs are with investment brokerage firms. But all of our other banking is done with your bank, and has been for a long time. We have a perfect record with you and with every other bank/lender/financial institution we’ve ever done business with.
Last Sunday, we got an email from a vendor we use for our business, letting us know that an automatic payment had been declined. I called the 24 hour number on the back of my corporate credit card to find out what was up. I was informed by a very nice employee that our credit cards had been closed as of January 20th. Well that’s lovely – any particular reason why? The gentleman told me that they were closed because of a report from Experian. But I would have to call back the next morning to talk to someone during normal business hours to get more information. That doesn’t make for a particularly good evening.
We called the next morning and talked to another rep who told us that the reason the cards were closed was because of low usage on the accounts. To back up a bit, when we opened the credit cards, we told the business banking rep at our local Wells Fargo that we would only be spending about $300 – $500/month on our cards. But we were given accounts with $10,000 credit limits. True to our word, we’ve put approximately $400/month on the cards over the last three years. We always pay the balance in full, and have never paid any fees or interest on our corporate credit cards. But the cards are essential to our business. All of the charges are automatic, recurring bills from vendors for services that we cannot operate without.
So on Monday morning we were told that our cards were closed because of low usage. We asked to speak to a supervisor and were told that one would call us back. But that never happened. The next day, I called back to try to get a supervisor on the phone. The person I spoke with on Tuesday told me that our cards were closed because of BOTH low usage and a report from Experian that indicated (according to Wells Fargo) that the balances on our personal credit cards were too high and that the amount of time our credit had been active was too short.
I spent 45 minutes on the phone with two people on Tuesday morning trying to figure out what was going on. Conveniently enough, I had copies of our credit reports and credit scores from Experian and TransUnion from the same week that Wells Fargo had apparently gotten their report from Experian. According to the credit scores I paid for when I got our credit reports, my husband’s credit is better than 93% of Americans, and mine is better than 78%. So it would seem that you must be closing an awful lot of accounts. There’s not much we can do about the length of time our credit has been active (we haven’t closed any accounts recently), and it’s been active now for three years longer than it had been when you gave us $20,000 in credit (even though we told you we only needed about $500). I discussed with the rep the fact that we don’t carry balances on any credit cards (confirmed by the credit reports), and that we charge a small fraction of the limit on our personal Wells Fargo card and AmEx each month, and pay off the balances in full. She didn’t know what to say other than that she was sorry. As for the low usage factor, no one at Wells Fargo was able to tell me what your requirement is for usage. That sure does make it hard to adhere to, now doesn’t it?
The reps we spoke with earlier this week told us that notification was sent to us on January 20th, informing us about the accounts being closed. Today is the 29th, and we haven’t received anything yet. Did you send the letters on one of your horse-drawn wagons? Just curious.
So, you want to know what I think? About three weeks ago, I called to see if we could have our cards set up with automatic payment from our Wells Fargo corporate checking account. Since we always pay the balance in full anyway, I figured it would make my life easier if I didn’t have to write checks from the account each month, and could just have the balances paid on the due dates. Ironically, we got our credit card bills on Tuesday, and notification was included with the statements telling us that the balance would be deducted from our corporate checking account on the due date. So now Wells Fargo is well aware that we will never be interest-paying clients. We never have been, although I suppose the possibility was always there. Until we set our accounts to be automatically paid in full each month.
Once you knew that we would never be interest-paying or fee-paying clients, you decided to get rid of us. But you did it in a way that we can never fight. Your minimum usage requirement is supposedly a corporate secret. And while the information contained in credit reports is objective and can be contested (ours is all accurate), a company’s use of that data is subjective, and we can’t argue with how you interpret a credit report.
I truly felt sorry for the Wells Fargo reps I spoke with earlier this week. They seemed resigned to having a pretty rough time of it right now. I asked them if this was happening to a lot of clients, and they both said yes. I was very upset, but I was restrained and apologized to the reps for being upset. I’m guessing that a lot of your clients weren’t so polite.
The most frustrating part of all this is the $25 billion in tax dollars that Wells Fargo received in the banking bailout. You’re welcome.
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Oh that is terrible, poor you! I hope you get a response back!
This is absolutely ridiculous. Goes to show that the banks never really wanted good customers to begin with.
Have you thought about pulling your accounts and going elsewhere?
Good luck.
Whoa! That is bad..
When I lived in the states, I have had very mediocre service at WF and didn’t know it until I moved to BOA.
I hope you get your card problem sorted out. Would going to a bank in person make a difference?
That is terrible. We haven’t had the greatest time with them either, but nothing like that. I think as far as credit cards go, a lot of this kind of thing is happening. We got a letter in the mail the other day telling us that all our interest rates are going up by 10% on purchases. Luckily we don’t use that card. We have a balance transfer on it but it is locked in at a 1.9% interest rate for the duration of the balance. As if paying off all our credit cards (and, shamefully, we have a large balance) wasn’t already a priority, it certainly is now. It seems that it isn’t just the people who don’t make the cards money are getting screwed, but those who make the companies lots of money in interest are getting hit too.
I hope you get a response. That is terrible and I hope they realize they are losing some stand up customers, which is what financial institutions need right now…people who who be filing bankruptcy. I hope you are switching everything else to a different bank. I find out local credit union to be very good. We aren’t just a number there. And even though ours is small, they offer plenty of services.
Have seen the reports of credit card companies profiling the cardholders purchases and then lowering the credit limit based on where they spend money. The guy that the story was about had a credit rating in the high 700’s and his credit limit was lowered based on the stores where he shopped. The customer service reps told him this and sent a letter stating it as well. I think the credit companies are getting mad b/c people are finally waking up trying to get out of debt. This will cause them to lose money so I think they are trying to get as much cash on hand and to elimate potential risk. Good luck.
These banks are all levels of insane. I’ve been actively paying off all of my debt recently and have been religiously making large payments to my credit cards for a couple of years. I have never made a late payment and in November, I received a letter from Citi Bank (The last credit card I have, and will ever own) stating that they were raising my rate from 6.99% to 18.99% in the next billing cycle unless I called and opted out of the increase. By opting out of the increase, they would not renew my card at the end of 2009 and the entire balance would be required in full.
I believe this was a blanket raising of interests rates for many of their customers. My wife, who also has a great record, also got the same letter about the rate increase. We don’t share card accounts.
I chose to opt out and keep my 6.99% interest rate because I will have the card paid off in April. The card rep I spoke to tried several times to goad me into keeping the account by warning me about the entire balance being due by the end of 2009. I told her I was more than capable of paying off the $2000 I had left on the $10,000 limit card, well before the end of the year. Two days ago, I received another letter from Citi, thanking me for being a great customer with a great payment record and “rewarding” me by upping my credit limit to $11,500. I’m sure they would love for me to run out and charge up the card again, and then hit me with all kinds of overage fees and interest increases when they close the card at the end of the year.
I’ve had a couple of bad experiences with Wells Fargo myself. I wouldn’t have had an account with them the second time but they bought my bank out. Now that they’ve bought Wachovia I’m stuck with them again. I won’t be using them as my primary bank though.
seriously
they act like they want you to pay things off, and pay things back
and then when people do, they drop them
ridiculous
just ridiculous
@Le Bob–Citi did the same thing to me. I received a letter stating that my interest rate would be increased to 16.99 percent. I don’t carry a balance, and have always paid on time.
Part of me was annoyed, but then I realized that they’ll never get a cent from me in interest, and in the meantime, I’m using them for airline miles. I have enough miles for two flights to Europe. So HA! Jerks.
I have heard about banks closing down credit lines, and this does worry me. Especially because my oldest card (with a huge credit line) isn’t one I use anymore. I’m going to make small purchases on it now to keep up some activity, but I’m worried that they could still close it down, which will affect my credit score, wiping out my longest-held credit.
They have us over a barrel, though. I can’t cancel all of my cards because that will lower my credit rating, and since we’re going to build a house in the next year, we need our high FICO score. It’s such a big scam.
So sorry this happened, FB. How frustrating.
That is really quite despicable. They should have give you a little more time to get your affairs in order – I mean, closing the account without fair warning? That’s bogus.
If you pay your balances off every month then WF is not making any profit by charging you interest. Companies everywhere are lowering credit limits, increasing interest rates and cancelling the cards of customers who pay their balances in full or who don’t use the cards that often.
I’m sorry, but as I work for a Credit Union, I just can’t resist playing devil’s advocate: Why should a bank keep open a card that is costing them money? I don’t believe it was your signing up for auto payment that triggered it (bank systems just don’t work that way) but even if it were, is it fair to ask a business to routinely lose money on a customer? If you had to spend $50 in gas to deliver a product to a customer that was only going to pay $40 for the product, would you do it? Maybe if it was a one time thing, and it would keep their business, but would you do it if it routinely *cost* you money? Certainly not. I understand your frustration, and it is shared by many, many people. But you have to concede that you have been receiving a convenient service for them free of charge for many years. You have been *costing* them money for those years, and now they are doing everything they can to just stay afloat.
Hi.
I’m a stranger reader of your blog, LOVE it, but I wanted to say that at my work we use Wells Fargo for financing and I just read a notice today about them closing our account due to low usage.
Seriously? I am so mad about it, it’s ridiculous!
I may be wrong, but don’t credit card issuers make money even if you pay off your balance each month? Don’t they charge merchants a percentage (3-4%?) on each transaction?
It’s getting to the point that the pay day loan companies are looking respectable. I don’t have any corporate cards but I’m wondering if they might start doing this with personal cards too. I do know that people that pay their balances in full every month are referred to as “dead beats” in the industry. It seems the only ones being rewarded are the ones that squander all their money. Things like this make my blood boil!!!
First, anyone who has a card cancelled on them for low usuage. Or if you cancel it yourself — please write the credit reporting agencies to contest if they use these facts to lower your rating. I had a MC stolen in 1998 and they messed up the cxl process resulting in cards being opened and cxld in my name about 20 times. I got it all removed with a nice letter. Cxl a card should not hurt your credit (I think that is a myth perpetrated by CC companies). So would not worry about that if you are building a house and need credit. As for Wells Fargo, I decided long ago that they don’t care about anything but $$. I used to manage a hotel across from a central Wells Fargo that they used to interview and train new employees. The number of problems that employees encountered while paying bills with their Wells Fargo cards was outrageous. And even as employees they had to go through the same circular route of reasoning to find out why their card was being declined to pay for a hotel room that their employer had reserved. And, being a hotel we also had many immigrant workers (legal) with bank accounts at wells fargo. They would send money western union style from their bank accounts straight to family in other countries. Wells fargo would charge 25% per transfer. So Joe Shmoe would earn $600 and send $400 to his mom who would only get $300. Wells Fargo would then be $100 richer for the simple act of wiring money. They do this for how many millions of people? And make how many millions of dollars this way? Talk about unethical. Sorry for the rant, but Wells Fargo is a place I will never ever bank!
This just happened to my family’s small company. Perfect credit, low usage, checking with the bank and we always pay the balance in full.
So frustrating for you and for us. It makes me want to cry…
@Holly
Merchants are indeed charged (its closer to 2% depending on what company you go through) but that fee goes to the merchant’s bank.
So, as a retailer I have a Merchant Account with WaMu, and I pay them every month to process my transactions for me. If your credit card is issued through, say, Pentagon Federal Credit Union, and you use it in my store, PFCU doesn’t make money on the transaction. They also don’t offer Merchant Accounts, so they’ll never make money that way. They only make money when you carry a balance. Also, Visa (or Mastercard, or Discover, etc.) get’s a cut of it, but I don’t know how much or how it is calculated.
“You have been *costing* them money for those years, and now they are doing everything they can to just stay afloat.”
Yeah, they need to free up some credit so they can prey on low income people who are more likely to accrue interest fees and late charges.
Shame on you, FB, for not being more irresponsible with your finances and costing Wells Fargo, with their spotless lending practices, money.
@Green Me–Canceling the card won’t lower my credit per se, but canceling a card that has 5 years more history than any of my others AND over $12K in credit line definitely will affect my FICO.
History and available credit are two of the factors used to calculate your score.
I know of another person who had their Citi account closed for lack of usage–but this person was not using the card. You guys were actually using the card. Also, it sounds like Wells did this with very little notice or no notice, which is mind boggling. Wells posted a several billion dollar loss and may be panicking. They may trying to get rid of non-moneymaking customers to downsize their customer base in order to start laying off reps etc . . .
If you plan on opening elsewhere–I know BofA is offering a $50 bonus for free checking–you could also go to Wamu with their free checking/savings and they are offering a $100 bonus (codes are coming in junk mail–also I know where to find them if needed).
Same thing occurred with our Wells Fargo small business credit card. Wells Fargo canceled the credit card with no warning on 20 Jan 2009. Letter arrived on 2 Feb 2009 letting us know.
They cited ‘insufficient activity’ but refused to say what their activity threshold was.
I could understand a letter from WF saying they would like to close the account because we do not incur late fees or interest – but let us know BEFORE WF closes the account so we don’t have auto-bill payment charges that are being refused.
Mario – Sounds like we were in the same round of closures. Ours was closed on January 20th too, and our letter arrived about the same time as yours. I finally got a call back from a supervisor two days ago, who said that the primary reason for the closure of our accounts was low usage, but he couldn’t/wouldn’t say what usage was required in order for an account to remain open.
I addressed the fact that it leaves bank customers in a very bad spot when the card is closed and the notification doesn’t show up until 10 days after the fact (especially when they have our email on file and could easily notify us as soon as the account is closed). Finding out your card has been closed by having a purchase declined isn’t good business. The supervisor I spoke with told me that the reason WF can’t notify us in advance is that some people then run up charges on the cards and never pay them back after the accounts are closed. WTF? Doesn’t that end up in collections, bad credit, etc.? Why would someone with perfect credit do something like that? It doesn’t make sense, but this whole thing doesn’t make sense.
Happily, I’ve found a local credit union that I think will work well for us. I’ll be visiting the branch (less than a mile from our house!) next week and hopefully will be able to start the process of leaving WF for good.
[...] getting a really bad rap, credit cards actually have a lot of advantages to them. Of course it all depends on how wisely you [...]
Interesting comments on this situation. I think that Frugal Babe is correct in pointing out that Wells Fargo after getting 25 Billion of our money is suddenly closing cards or adjusting credit limits. I was just notified that my credit card limit with WF was just decreased to just $140 above my current balance with them. This smells badly in several ways. While I have enjoyed a 731 FICO score for almost a year now, this move by WF (to “max” out my card with them) will certainly torpedo my FICO score with the other two credit reporting companies. By the way, always current, never late, always more than minimum payment consumer here. Also, I have (change soon to “had”) 3 savings and 2 checking accounts at WF.
I find it interesting that Experian has moved away from FICO scoring to consumers (as of 2/14) and to their own credit rating. It is extremely interesting to me that so many people are getting suddenly lowered FICO from Experian just prior to their change to their own system of rating. Can you say “I need to buy my Experian credit score before they switch to their own to see why my FICO score with them is suddenly lower.”? Would be interesting to see what Experian sales were during the month of January and February of this year versus last year’s same time frame. My $10 says it was extremely higher on the consumer side of their sales.
By the way the same day I got notification of this decrease in my credit limit with WF, I also received two notification from other credit cards I currently have announcing that “because of my excellent credit rating” my credit limits with them had been increased. ????!!!???
Interesting.
To Le Bob (and anyone else with credit rate increases): Too bad you already closed your account with Citi. I got the very same letter, moving me from a 9.8% to a 16.99%. In your same position with pay-off of account scheduled for first half of this year. Called Citi and after talking to rep on line (not even the supervisor) voiced my concern about this change and mentioning that I would be paying off the account this year and closing the account. Suddenly things changed. I now have a different type of account (not Dividend but Cash Back , same account number) but now my new card with them has an 8.6% interest. Actually dropped on interest rate!
(Here’s an interesting sidenote; because I changed to a Cash Back type account I actually got $165 back for changing to this account and a lower interest rate!!). FYI for everyone, in the future I’ll call first and see what they are willing to do.
I would be sending copies to my senator and my congressman. They need to know this kind of *** that is going on. It would be great if you could send some of the comments too, but don’t know if that is OK.
Patricia – That was the first thing I did. I sent letters to our senators, congressional reps, and our state attorney general. I wouldn’t have involved them except for the TARP money. Once a bank starts taking taxpayer money, they have to be held to a higher standard of accountability.
I received a letter from Wells Fargo that they are lowering my credit limit from $14,700 to $1,000. I was extremely dissapointed to find out about this because I have never made a late payment and my account was in good standing. At the time they received a credit report from Experian, I had accrued debt because I started a new business but I quickly paid them off. Unfortunately they did not take that into consideration and Wells Fargo said they would be glad to a credit check to verify what I said was true but it would be a hard hit. I told them why would I want to get a hard hit on my credit card to get the limit I once had just because they did not see all of the latest information. Anyways, if all my bills were not automatically debited from this credit card, I would have gladly closed the account and went to another bank but I don’t want to deal with the mess of updating all my accounts. My final comment, the credit card I have with them has been opened for over 5 years and it has been in perfect standing. Now that I think about it, I will close my account. Hopefully others will do the same.
Great post. I encourage all who bank with the large banks to look for a reputable credit union for the following reasons:
1. Lower borrowing rates
2. More financially sound
3. Fees are much less and there are less of them
4. Personal attention
5. Sources for just about any service you can find at a big bank
6. You are one of many owners by virtue of your membership
7. More forgiving grace periods if needed on loans and debts
8. Will work with you should a problem arise
9. Has positive equity and in no need of a bail out.
10. Better customer service.
11. Less bureaucracy.
12. Reports to the credit agencies.
Des,
I respect your comments about being in business to make money and you are right….on the business side a company wouldn’t want to continue to lose money on a service they provide. The flaw may rest with you if you believe that ever offering the option of a) not using the card, b) using it only occasionally or c) using it and paying it off every month, all of which results in in paying no finance charges (bank profit) actually costs the company money. They wouldn’t allow these options if there was a loss involved. Bad business model. While I am not sure how the money is made just yet on the bank side from non-finance charge paying customers, I am reasonably sure that the banks are not losing anything but rather not gaining as much in profits.
So, if you can arrange to pay off your credit cards every month to avoid finance charges, by all means do so. To be penalized by an allowable event is hypocritical at best.
Welcome to the new world of financial instability. I have/had 2 cards with Wells Fargo, being human, I forgot schedule a payment in advance as I usually do and remembered at the last minute. I logged on, went to payments and clicked the WRONG card. Now, my husband is 73 and we are on a fixed income. I called Wells Fargo as soon as they opened the following business day. Of course, it had already been submitted so they said they could do nothing about it, to stop payment at the bank. The bank said it was too late to stop payment because it was already in their system, but if there were not sufficient funds to PAY the amt due, they could send it back. Needless to say I could not afford 2 $335.00 payments so I went to the bank, withdrew the money and gladly payed the NSF fee. I called Wells Fargo and explained what I had done and why. They said they understood and I had to do what I had to do. So, I paid the CORRECT account and, made a payment on the other card too. Low and behold now, 10 days after the fact I have 2 $335.00 deductions in my account from Wells Fargo. What the representative DID NOT TELL ME WAS THEY SUBMIT PAYMENTS 3 (THREE) TIMES!. So, ignorant me not only has the original (erroneous) payment deducted from my account, I have $300.00 in NSF charges now also. Am I mad, certainly, will I do anything differently? Yep. Go to a new bank, and close the credit cards…….oh yeah – I forgot only Wells Fargo can close an account when there is a balance……an individual can’t. Guess who I am not going to be doing business with anymore. I am on a fixed income, guess what we don’t buy for the next 4 weeks until I can pay this off???? I guess I really did need to lose some weight.
Same thing happened to me. I had a small business credit card with a huge limit that I told them would never be used. I had recurring bills paid with the card every month and I paid off the card every month. I went to the post office one day to buy stamps and the card was declined. I called WF from the post office parking lot and got the same exact wording, low usage and experian report….
After many calls and visiting a branch, I ended up pulling all of my accounts from WF. I don’t want to bank with a company that has so little respect for its good clients. I had my credit report with me at the bank and it was in excellent range. The rep I was working with at the branch told me that he didn’t think it was fair what WF was doing either.
I would have been ok with them cutting my credit limit down or I might have even been ok if I had been informed of the date it was going to be canceled so that I could get things in order, but my notification came almost 3 weeks after the date I tried to use it.
My advice is not to bank with WF, especially for small business.
I own a small business and just logged into my Wells Fargo account today to pay off the balance off of my business credit card, as I do every month. What do I see? Big red letters stating ‘THIS ACCOUNT IS CLOSED’. I was never notified, never saw this coming. My experience very much mirrors that of frugalbabe and is absolutely horrible. This is my business! My life! I’ve been banking with Wells Fargo for 15 years and this is how I’m treated. I’m switching banks asap. It was so nice to see, though, that I’m not alone…
Thank you for sharing this post. This is why I made the switch to work for a credit union. Although no financial institution is without fault or problems, it is my opinion that to maximize your financial relationships, you should never put all your eggs in one basket. Whether it is looking for primarily online savings to yield better interest on deposits, going to a local community bank or credit union for better rates on loans, and a combination of self-directed investment strategies, etc. it’s sad to say that there is no longer any loyalty in the banking industry. Things have changed completely in our world.
It’s really messed up how they closed you out because they can’t make any interest off you.