Consumer complaint received 2021-10-09
Company: WELLS FARGO & COMPANY
State: TX
Product: Credit card or prepaid card
Sub-product: General-purpose credit card or charge card
Issue: Advertising and marketing, including promotional offers
Sub-issue: Confusing or misleading advertising about the credit card

Complaint:
On XX/XX/XXXX we obtained credit from Wells Fargo ( classified as XXXX XXXX - issued through our HVAC vendor ) to cover the expenses of a major purchase in the amount of approximately {$9900.00}. For this loan we were given a special interest rate of 9.9 % APR. Most months we paid slightly more than the minimum payment ( minimum payment was {$180.00}, we payed {$200.00} per month ). 

We have not made any other charges to the credit card until XX/XX/XXXX, when we experienced another need for expensive repairs. Since we were using the same vendor we asked if we could charge the cost against the same card and asked if Wells Fargo was offering any special finance terms. The woman in the finance office contacted Wells Fargo and we learned that there was a special finance offer of 0.0 % for 18 months. We elected to take advantage of this offer. 

When the new charge appeared on our credit card statement I increased the amount of our payment to $ XXXX/Month. On my XX/XX/XXXX statement I noticed that the loan amount of the no interest loan was not decreasing enough on monthly basis for the loan to be paid off in 18 months ( the balance on the no interest load was decreasing each month {$57.00} ). So for the XXXX payment I increased the amount to {$290.00}. When I received my statement for the following month, the amount applied to the no interest balance was still only {$57.00} ). 

I called Wells Fargo to ask what I need to do to reduce the balance on a monthly basis in order to pay it off at the end of the special rate period. I was told that there was nothing that I could do, that the way they apply payments is to apply first to the balance against which interest is charged, then once that balance is paid in full the payments will be applied to the no interest portion of credit card balance. Either what she told me is not entirely true, or I misunderstood what she said, since they are applying {$57.00} against the no interest balance each month. If the monthly payment was being applied against the outstanding balance with interest then the no interest balance would not being reduced at all. 

The no interest balance has a APR of 28.99 % and this interest is being deferred, and if I do not pay off this balance within the allotted timeframe then I will be charged the entire deferred interest charge, which will be slightly less than the original loan amount. 

The way Wells Fargo is applying the monthly payments makes it impossible for me to pay the no interest loan prior to special terms end date. This practice seems deceptive and predatory, especially given the fact that I made an effort to arrange to direct my payments to pay off this balance within the agreed timeframe.

Company public response: Company has responded to the consumer and the CFPB and chooses not to provide a public response
Company response to consumer: Closed with explanation