Why I Parted Ways with Wells Fargo

A few weeks ago my husband and I found ourselves driving along El Camino Real trying to decide what bank we were going to choose for our new business. We had already tried our credit union, but in this instance they couldn't help us out because they don't offer small business accounts.

So there we were, taking a shot in the dark on one of the brand name banks (or what's left of them). On our left was Bank of America. “No way,” I said, "they're in deep trouble ever since their merger with Merrill Lynch.” On our right was Citibank. “Even worse,” I told him.

Then there was Wells Fargo. “Well, at least it's based in San Francisco, so it's relatively local,” I thought, all the while having the sinking feeling that we really shouldn't rush into this without doing more research.

But my husband was determined that we stop paying business expenses out of our personal accounts so we arrived at the new accounts desk where we met your typical unctuous account manager. After signing mountains of paper work, he finally got around to what I really interested in: fees. “You may see a fee on your account,” he told us, “but just let me know and we'll remove it.”

“Does the savings account bear interest?” I asked and received a blank look. I took that as a “no.”

The first signs of problems appeared when I couldn't get the Wells Fargo account information to download into my Quicken software. The account manager had called my husband to see how things were going even though we'd made it clear that I handled the finances for the new company.

"How do I download my account information?” I asked. He gave me a toll-free number to call. He gave me another toll-free number when I asked about online bill payment. He didn't say anything when I told him a "check card rewards annual fee" had already turned up on our account. The guy was great at giving out numbers and asking how we liked our account but not very good at anything else. Nor were the people on the toll-free line who couldn't even figure out whether Wells Fargo supports downloads into Quicken.

Then the real problems started. I had set up online bill pay, where I admit the instructions said that bills would take two business days to process. Of course, at my credit union, these electronic transfers never take two days since computer transactions are supposed to speed up the whole process of paying bills. Otherwise, we'd still be using snail mail.

But not at Wells Fargo. There a payment that was supposed to take place on the Thursday before the Presidents Day weekend actually took until the following Tuesday to go through, technically two full business days. I had to call my credit card company to reverse the late charge, and I was steamed. “You should schedule these payments a week in advance to be sure they arrive in time,” the customer service person told me over the phone. "Why?" I thought to myself. "Is Wells Fargo still delivering money by stage coach?"

For the privilege of having my bills paid as slowly as possible, I also found out that Wells Fargo was going to charge me $20 a month. Despite the promise of a fee waiver, I was also being charged $20 for the privilege of having a savings account that paid no interest. Plus $35 for a box of checks and $12 for a Rewards Check Card, aka an ATM card, I never asked for or even activated. My Wells Fargo Business Services Package account that was supposed to offer me "greater value that will save you money and time" was certainly not doing either.

The final straw occurred when I received my first statement and noticed the following notice on the last page: “Effective April 1, 2009 the Deposited Items Fee will be $0.50 after 20 free deposited items. Also, the Cash Deposited Fee will be $0.20 per $100 after 5,000 free cash deposited." This was followed by a list of thirteen other fees that were also “changing,” a euphemism for “increasing.”

For a moment I could not believe what I was reading. Wells Fargo was going to charge me money for giving them my cash?

I immediately emailed the account manager who had been so eager to find out how much we liked our new Expanded Business Services Package. Why are we going to have to pay to deposit funds?” I wrote. “I have never in my life paid any institution to give them my money."

I received no response, either by email or telephone, and a few days later I told my husband that we were going to close the account.

Getting our money back was no picnic either. The account manager on duty had to check with the bank manager to get permission to close the account. “We shouldn't be charged for the rewards check card since we never used it,” I told her. “I'll have to get the bank manager again in that case,” she responded. I looked at my husband who was already impatient to leave. “Never mind,” I said. “It's not worth the trouble.”

We opened our account with Wells Fargo on January 26th, 2009, and we closed it on March 6th. The experience cost us $87 and some small change.

In the meantime, I had done some research on the Internet and found a local bank that specializes in banking for high tech start-ups. They charge one basic fee per month but waive it for the first year while a business is getting going. So far Silicon Valley Bank has been a pleasure to work with and very responsive to any questions or concerns I've raised.

So what is the moral of my financial tale?

Our brief experience with Wells Fargo points to some of the fundamental problems with big banks in today's world. Not only are these banks “too big to fail,” which means they don't take the pain as well as the gain that of the free market, but they also don't offer small businesses or individual customers any better service in exchange for using a “name brand” company.

Most individuals and most small businesses would be better off going with a local credit union or a local bank that specializes in investing in its community than opening an account at a big "name brand" bank.

Bigger isn't necessarily better in the financial world, and it's not just our government and taxpayers who are finding that out. If I were a customer at Citibank, Wells Fargo, Bank of America, JP Morgan Chase, or Wachovia, I'd be shopping around for an institution that offers real service and doesn't nickel-and-dime away my savings. At the very least, I shouldn't have to pay my bank just for the privilege of depositing my money.