Wells Fargo Hit by Class Action Lawsuit: Did They Take Money From Your Account?

A California piano teacher says Wells Fargo drained her savings account and left her with just $102 in her checking account when it “seized” funds to pay her credit card without her consent.

Helen Palma is now suing the bank, alleging it acted illegally in taking funds from her account, and that she is not the only person affected.

Wells Fargo customers sue over unauthorized withdrawals

Palma alleges Wells Fargo has a practice of “unilaterally and unlawfully seiz[ing] funds out of a customers' deposit account if the customer does not timely pay [their] open end credit loan.”

She accuses Wells Fargo of violating consumer protection laws by:

• Unauthorized Withdrawals: Taking funds from customer deposit accounts without consent or notice.
  
  
• Ignoring Legal Requirements: Failing to provide notice or leave a minimum amount in accounts as required by state laws.
  

“If they had known that Wells Fargo could take their money without warning, they wouldn’t have banked with them,” Palma says.

Wells Fargo is a major national bank with millions of customers across the United States. Palma claims that the bank’s practice of taking funds without notice has left many customers unable to meet their basic needs.

How unauthorized withdrawals harm customers

Taking funds without consent can have serious consequences for customers. Palma states that these withdrawals often leave people without enough money for essential expenses like food, rent, and transportation.

“While banks have the right to collect on debts, they must follow legal procedures,” Palma says. “Wells Fargo’s actions are not only illegal but also harmful to its customers.”

She says when she fell behind on her credit card payments, the bank sued her and obtained a judgment for the debt. However, under California law, Wells Fargo was required to give notice and leave a minimum amount in her account, which they failed to do,

Wells Fargo empties account, lawsuit states

On February 2, 2023, without prior notice, Wells Fargo allegedly took $284.03 from Palma's savings account and $181.41 from her checking account.

“In blatant disregard of these rules, Wells Fargo skipped the legal process for a bank levy, which would have prevented it from taking any money out of Ms. Palma's accounts, and instead unlawfully helped itself to her funds and left her with only $102.74 to her name,” the lawsuit states.

Palma claims that when she tried to get her money back, the bank "gave her the runaround" and refused to return her funds.

Seeking justice for California residents

Palma is aiming to represent other California residents who have had funds taken from their deposit accounts by Wells Fargo to offset balances owed on credit accounts over the past four years. She estimates the class includes more than 1,000 members and seeks damages, an order to stop the practice, and a jury trial.

Wells Fargo has paid out billions in settlements

Wells Fargo reached several class action settlements in the past, including for credit card fees, mismanagement, and alleged breaches of securities laws.

• In 2018, the bank paid a $2.1 billion fine for misrepresenting mortgage quality, contributing to the 2008 financial crisis.
  
  
• In 2022, Wells Fargo paid over $2 billion to consumers and $1.7 billion in civil penalties after the Consumer Financial Protection Bureau found mismanagement in several of its product lines.
  
  
• In 2023, the bank settled for $1 billion over misleading shareholders about its recovery from multiple scandals.

And just this year, Wells Fargo settled to reimburse over 190,000 California consumers charged for credit defense fees without consent.

Case Details:

• Lawsuit: Palma v. Wells Fargo Bank, National Association
• Case Number: 3:24-cv-02618
• Court: U.S. District Court for the Northern District of California

Plaintiffs' Attorneys:

• Daniel "Sparky" Abraham and Scott C. Borison (Jubilee Legal)