After finding disturbing money float issues with Chase, I checked our company’s Wells Fargo credit card account for the Float Pay Scheme I outlined before. Sure enough, it is used by Wells Fargo, too. I really should be calling it the Float Pay Scam.
It turns out we made a payment of the balance in full late in March for $3,600. The payment shows as “posted” on 4/1/2011 in the online account register. Curiously, it was not included in the “available credit” total. So I called yesterday, April 15.
The agent told me that the payment was in hold and would be posted “tomorrow.”
I said: “No, it shows as posted on 4/1/2011, right here?”
She said: “Yes, that’s when we received it.”
“Why does it show posted when it really isn’t posted?” I asked.
“It’s probably because you didn’t use a Wells Fargo checking account to pay. So we hold until the check clears the bank.”
I checked our checking account. The check cleared on 04/04/2011. The evidence is that Wells Fargo took our payment, received the money, and did not make that money available to us through the credit line until twelve days after the check cleared the bank. My first reaction is that this is illegal, a scam. But when I think about it, essentially, there is probably nothing wrong with this, since it’s a credit line and it’s their money that they are lending out. So they are lending it just a little later.
What is really going on it that they are using our money to lend it to others at high interest rates. What’s wrong with this is that they are lending it to us just a little later. If we are paying off our entire balances this is not a problem, because we are not paying interest. However, if we are paying interest on this money, are they collecting double interest? There is no way to tell, from the account statements, when they are charging interest for our money to us, and to others, through the float.
For us consumers, it would be much better to get prepaid cards, which would be like debit cards, and our own money would be available without restrictions to ourselves the moment we make the payment.
What is REALLY wrong is that the credit card companies are now doing this without consumers knowing about it – and rejected credit cards at hotel desks are very embarrassing.
So why didn’t you request that Wells Fargo send you where this Float Pay Scam is permitted by law. The “Card Agreement” which is included when one receives their credit card & “updated” references terms of “Credit Limit” as permitted by law. Guess who didn’t get approval from board members for raise just recently? Vikram Pandit, CEO of Citi & a bunch of nuns were featured on the news as leading the charge. Very few consumers know about this scam. I think it’s illegal. Settlement attorneys do the same thing. They schedule am settlement on Friday, deposit the funds in an interest bearing account before 2pm and then slow walk disbursing the funds maybe on Monday or Tuesday. We consumers can change this. Power of the press.
I have learned – the hard way – that picking a legal battle eats up several hundred thousand dollars of cash before you get anywhere. You may prevail at the end and get your money back – years later, but initially you have to have the cash to do the battle. Clearly, that’s not one I want to fight against Wells Fargo. However, using the media and exposing this practice is definitely an option we have. I appreciate your comment on this.
I just had this same experience with Wells Fargo. They received a payment from me, it cleared my bank, but they will not make the funds available for 15 days!!!
I just had this happen to me I paid through my PNC bank direct bank to bank payment and my $1000.00 credit was not available to me for 15 days. I had planned on using the card for my monthly expenses and pay it off each month. The bank rep I spoke to said they could not explain to me why my payment for the account was placed in a float status. So I told the bank rep that I was going to be canceling the account and filing a complaint with the FDIC as this practice should be illegal since they were holding my $1000.00 payment to them hostage for 15 days. IF I was to pay the min payment of $25.00 then use my cash on hand that I would have had then I would not have had the problem and Wells Fargo would not have gotten a paid off balance. This practice sucks.I wish I knew where I could report this quickly and efficiantly without spending a ton of time on trying to right this wrong…
It’s a scam, isn’t it?