Consumer complaint received 2017-10-25
Product: Mortgage — Home equity loan or line of credit (HELOC)
Issue: Trouble during payment process — 
Company: WELLS FARGO & COMPANY (CO)

This involves Wells Fargo, and I would be surprised if our problem is n't systemic, especially given the nature of other Wells Fargo travesties. It is seemingly small, but in aggregate could result in substantial extra funds. I would recommend that CFPB look to see whether there are any other complaints of this nature. If so, then I think CFPB will find that an examination of other similar loans will find this same issue in other Wells Fargo loans. 

This involves a home equity line of credit. On our loan, ( {$35000.00} ) was for a variable interest rate, except if  we were to elect to take out all the funds in which case the outstanding balance would convert to a low rate fixed. Wells Fargo verbally encouraged us to take the entire amount in order to take advantage of the lower fixed rate. Wells Fargo, puts a early termination penalty on this loan, so as to discourage an early pay off. No problem so far. 

We wanted to pay off the loan at an accelerated rate at {$500.00}, beyond their normal monthly payment amount of {$140.00}. We specified this at time of loan origination and arranged for an automatic payment. We also specified before the time of loan closure that we would withdraw the entire line of credit in order to gain benefit of the low fixed rate. ( Note : Wells Fargo personnel drawing up the loan papers deliberately asked us whether we intended to withdraw the entire amount. ) During this part of the process, Wells Fargo also encouraged us to withdraw the entire amount. 

What we did n't know was that Wells Fargo creates a second account at the time the loan is created : one account is the variable account, the second is a fixed rate account. 

When Wells Fargo prepared the paper work, they set the larger loan payment ( {$500.00} ) to pay off the balance in the variable account. The balance in this account was {$0.00} because we had taken advantage of Wells Fargo 's offer ), therefore, Wells did not make an automatic {$500.00} payment. Instead, they made an automatic payment of {$140.00} to the fixed account ; this amount barely covers the interest charge. 

We know this because we received our statement, and it showed no automatic withdrawal. We went to the branch and asked what happened. After half an hour of complaining, and reviewing our copies of the loan papers, we discovered what they had done. Finally they contacted their consumer loan department. After talking to their loan department, they agreed to change the automatic {$500.00} payment so it would apply to the account that actually had a balance. ( By the way, when we raised the issue with the Wells Fargo branch manager about Wells Fargo 's previous fraudulent acts, he said that was just our opinion. No matter how we presented that issue, he repeatedly said it was our opinion. There was no acknowledgement to us as customers that we had any reason to be suspicious. ) We think this the way Wells Fargo set up this account was done on purpose. They have so much experience setting up this type of loan that it is unlikely to be a mistake. By intentionally setting their processes to apply the larger automatic payment to an account with zero balance, they could increase the amount of interest they collected on this loan. Moreover, the way they set up the loan payment statement, it was not readily clear what was being applied to the outstanding loan balance. The problem getting it changed also contributes to this belief. If a customer has a problem getting the automatic payment set up, or does not pay attention to the loan statement, Wells Fargo makes more money off the account. 

By the XXXX statement we did not see a change. So we called again to Wells Fargo and got their " loan customer service '' department. The customer service department told us that we had complained too late, and that they had not been able to change the payment so it would apply to the XXXX statement. During the call to the customer service department, I asked if the call was recorded. It was, so I told the customer service that I thought that this was a type of fraud similar to Wells Fargo 's past practice of opening fake customer accounts, and adding insurance to the auto loan accounts. I asked the customer service representative to make sure her supervisor knew of the fraud claim. ( I told the customer service representative that they were n't the cause for the problem and we had no issue with customer service. We closed that call letting the customer service rep we were entirely saftisfied with her help. ) I knew addressing fraud would get me a person higher in the chain to address this issue. 

I got a call from someone in Wells Fargo 's executive offices. To the best of my knowledge, this call was not recorded or monitored. When I asked whether it was, the party, XXXX XXXX, said he did n't know. It was as unsatisfying call one can receive. He knew nothing about the account, nor did he really understand the issue. I told him if he went back to the original loan documents, he would see that Wells Fargo had set up the accounts to our disadvantage, and that I thought they had been set up this way on purpose. He seemed to be a damage control person. A lot of his questions were " fishing '' in nature. At one time he said, " And you also have a complaint about the online banking. '' We had raised no other concerns, and I had no idea why he raised this " specious '' concern. 

He called again today ( next day ) to say the problem was corrected. Their claim and contention was that we asked Wells Fargo to set up the automatic payment to the vacant account. 

I said that A ) we did n't know they would set up two accounts ; B ) therefore, we would n't ask them to apply it to one account or the other ; and, C ) we certainly would n't ask them to deliberately apply the automatic deposit to an account which had no balance due. 

Wells Fargo 's response was, " You signed papers which prove to us that you asked us to set up the account this way. '' This would be the same response given to a consumer who had purchased insurance on a loan that they did n't know about until later, and then complained to Wells Fargo. There was no statement from him that Wells Fargo had made a mistake, or that they had any blame. I am a former federal government senior executive and regulator. This individual was not going to address the issue ; his intent was only to say they corrected the issue, which of course they claimed we caused.