Consumer complaint received 2021-01-11
Company: WELLS FARGO & COMPANY
State: CO
Product: Credit card or prepaid card
Sub-product: General-purpose credit card or charge card
Issue: Fees or interest
Sub-issue: Unexpected increase in interest rate

Complaint:
I received my XXXX statement and noticed a {$12.00} interest charge with no explanation. I have my account on Auto Pay for {$870.00} a month, well above the minimum payment to pay off my balance within the allotted time frame. 
When I called to inquire about the interest charge, I was told it was on a previous promotion that was not paid off in the proper time frame. I asked how was that possible when I was paying so much above the minimum payment. I was told that according to the Wells Fargo payment program, payments were allocated to the highest balance first and the remaining amount is then applied to the lower balance. 
First, the allocation to the different balances is not shown anywhere on the statement. What is shown under the Interest Charge Calculation is an Ending Balance for a Promotional Balance, but nothing is shown on the remaining 0 % Purchases Balance. The first thing that shows up here is on my XXXX Statement that shows the Balance Subject to Interest Rate is {$920.00}. When I asked about this, I was told this figure means nothing and that my remaining balance on the prior promotion was {$330.00}. So, I asked how do I pay this off since I was told the automated payment plan was fixed and could not be changed. I was told to make my usual payment and then when it posted to make an extra payment for the balance on the first promotion. I have made my payment of {$870.00} and an additional payment of {$400.00} to be sure the prior promotion is paid off. I will wait to see if this is in fact true and I will not be charged interest again. 
Nowhere on my statement is there a section that explains about your allocated payment program either with a table or an explanation under the written section titled Important Information About Your Account. Without making a call and trying to figure out what the problem was I would again have been charged interest that my monthly payments were more than adequate to pay off in a timely manner. 
Your allocated payment plan practice ensures that you will be able to charge interest even when sufficient payments have been made to more than cover the remaining balance by the XX/XX/XXXX due date. I made payments totally {$3200.00} from XXXX through XXXX with only a minimum payment requirement of {$520.00} to avoid interest. Clearly there were sufficient funds to pay the XXXX balance of {$1600.00} off before XX/XX/XXXX and still have sufficient funds to apply to the balance transfer in XXXX and the associated fees that are not due to be paid off until XX/XX/XXXX. 
In the statements before XX/XX/XXXX under the Interest Charge Calculation it does state that the promotional rate on purchases expires on XX/XX/XXXX but it shows a {$0.00} balance subject to the interest rate until the XXXX statement. Also, the promotional balance that expires on XX/XX/XXXX shows an Ending Balance so why is this same information not shown on the Purchases to alert the consumer that there is an amount owing on this promotion. 
I wrote the company and told them to consider this a formal complaint that their allocated payment program is in fact a hidden interest charge that a consumer has no way of finding out about until it appears on a statement showing interest is owing with no explanation. I also told them that I planned to file a complaint with the appropriate consumer agencies since as a consumer I believe this practice is in reality a hidden fee/interest that is totally unacceptable and takes advantage of even the most educated consumer. 
When I sent my letter I referenced my credit card number so the company has all the relevant documents related to my complaint in their own records.

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