I have had a debt with Wells Fargo Educational Financial Services for a long time. One day without warning, they took $1500 from my checking account claiming the Right to Setoff per the loan agreement. My checking account happens to be with Wells Fargo.
I received no summons or judgment, so it wasn’t a legal proceeding.
Had I held my checking account with another financial institution, could Wells Fargo have exercised that right there?
How often can a bank exercise this right?
FOSTER
Comments
Andre,
I suspect that your agreement with WFEFS states that they can set off an unpaid debt against any account you have in any other Wells Fargo-affiliated or owned business. I don’t think they have the right of set off against your accounts in any non-affiliated bank. It may also be called a “cross-collateral” clause. Sorry. If in doubt, file a complaint with your state’s banking or consumer credit regulatory agency.
If they’re going to debit your account, they are not going to tell you. That is why you should never have your checking account where your loan is.
If it was with another bank, they could not have done it without court order.
