Consumer complaint received 2019-07-06
Company: WELLS FARGO & COMPANY
State: DE
Product: Credit card or prepaid card
Sub-product: Store credit card
Issue: Advertising and marketing, including promotional offers
Sub-issue: Confusing or misleading advertising about the credit card

Complaint:
In XX/XX/XXXX I responded to an advertisement from XXXX XXXX promoting a furniture sale and offering either a cash discount or interest free payments for 36 months with financing by Wells Fargo. I opted for the interest free payments. Since I had not used this type of financing before, I spent hours scrutinizing the initial billing statements to ensure I understood Wells Fargos calculations, and I confirmed that if I made 36 monthly payments in the amount of the minimum due ( {$120.00} ) as listed on Wells Fargos billing statements, the principal balance would be paid in full within the promotional period. To avoid the possibility of any problems, I then set up automatic monthly payments of {$130.00}. 

In XX/XX/XXXXbefore the original interest-free promotional period expiredI was again shopping at XXXX and then offered a similar choice between a cash discount or 12 months of interest free payments. I asked if I was eligible since was already participating in the first promotional, and if so, how it would work. I was told that, yes, I could take advantage of the new offer and that all I would need to do is to make the new minimum payments such that Wells Fargo received payments sufficient to pay off each balance within the applicable promotional period. I accepted. 

My next billing statement indicated that the minimum payment due on the account was now {$200.00}, which was the amount needed to pay for the second purchase within its 12-month promotional period. I adjusted my automatic monthly payments and made all payments at scheduled and consistent with the Wells Fargo billing statements and minimum monthly amount due. However, at the end of the promotional period Wells Fargo, without warning, applied a {$680.00} interest charge to the account! As soon as I became aware there was a dispute, to avoid any further issues, I immediately paid off the entire remaining principal balance for the original purchase even though its 36-month promotional period did not expire until XX/XX/XXXX, roughly 8 months later. 

After steadfastly disputing the interest charge, and an extensive review of the underlying payment history and documentation, it is apparent that Wells Fargo artificially manufactured its interest claim through false, misleading, and deceptive advertising and billing practices. Specifically, although Wells Fargo issued billing statements with a minimum payment that ensured payment of the 12-month financing within the promotional period, and although I had an additional 8 months within which to complete the payments on account of the 36-month financing, Wells Fargo did not apply the payment that I remitted consistently with its calculation of the minimum amounts due. Instead, it took the payments made on account of the 12-month financing and applied themwithout any disclosure whatsoeverto the 36-month financing. And theneven though it has received payment of the entire balance due under the 12-month financing within the promotional period, because of the way it secretly applied the payments internally, it cried gotcha and applied an interest charge. 

This is absolutely shameful and abusive. Moreover it is inconsistent with industry practices. Other companies, such as XXXX XXXX XXXX and XXXX XXXX, to name a few, when multiple promotional period apply, disclose on their billing statements that outstanding balance due, the promotional expiration date, and the minimum payment due for each separate promotion. Wells Fargo does not. Wells Fargo simply provides one total minimum payment due for both promotions, and by conflating the two separate promotional lines and calculating the minimum payment in a way that is designed to mislead consumers into believing that their payments are being made on one account, and then secretly applying them to another account without disclosure, it is able to artificially manufacture artificial interest claims for itself. In all of our discussions about the account, Wells Fargo has not disputed this. 

In fact, Under Wells Fargos logic, by accepting XXXX  promotional offer with respect to the second purchase, I was waiving the benefits of the first promotional offer because the only way to pay off the second purchase within its promotional period would be to pay off the entire original purchase financed and waive the remaining 8 months of the original interest-free period! This was nowhere disclosed in the Wells Fargo/XXXX marketing and advertising materials, and is contrary to the representation that XXXX made to me when enticing me to accept the 12-month promotional rate and to make another furniture purchase. 

In an effort to resolve matters, although I dispute that any interest is due, in XX/XX/XXXX I offered a {$150.00} payment in satisfaction and accord of all disputed interest charges. Wells Fargo accepted the payment, which pursuant to Section 3-311 of the Uniform Commercial Code fully satisfied the original contract between us. 

However, despite its knowledge of the underlying dispute, and despite its acceptance of the payment in satisfaction and accord of our original contract, Well Fargo has repeatedly exacerbated the situation by improperly flagged my account as past due andwhen I submitted a dispute to the credit reporting agenciesthen knowingly and falsely claiming that the interest charge that it is seeking to collect is undisputed. These knowing and willful false statements are in blatant violation of the Fair Credit Reporting Act. 

While I am still hopeful that this can be resolved without litigation against Wells Fargo, I am not optimistic given their repeated, and escalating, improper actions. I am certainly moving all of my accounts away from Wells Fargo at the first opportunity ( ending a 34 year banking relationship with them ) and I will not be doing business with them again.

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 monetary relief