On June 21, 2023, Wells Fargo bank closed approximately 14 accounts related to me, my employees, and my businesses. They provided no official reason, but one of their employees stated on the phone that upper management was uncomfortable with my legal and compliant involvement in cryptocurrencies.
Wells Fargo also closed additional accounts that had nothing to do with cryptocurrency, including two credit cards. One of the cards had accumulated hundreds of dollars of "rewards points," which Wells Fargo claims they are permitted to seize, even if they initiate account closures without warning.
I sent a demand letter to Wells Fargo, stating that I would not pay them for those rewards points, on the grounds that their contract is legally "unconscionable:"
https://shoemakervillage.org/temp/wellsfargocensored.pdf. A check was enclosed for the balance due above the rewards points.
This market resolves to YES if litigation commences between me and Wells Fargo in any court before the statute of limitations expires on this credit card balance. The plaintiff could be Wells Fargo suing me for nonpayment, or me suing Wells Fargo to defend my credit score. The cause of action is irrelevant; other causes like defamation would also suffice. I plan to do nothing unless Wells Fargo makes the first move by suing me or reporting the account as delinquent to a credit reporting agency.
If no civil litigation occurs within the two-year statute of limitations, the market resolves to NO.
See updates in the comments. I've also included images there.
Related questions
Update #5: I applied for several more credit cards and was rejected. I also spoke with a Wall Street Journal reporter about this case.
This case will be filed in July, if I am not able to mitigate my damages by getting another card before then. The issue is that I owe $20,000 to Wells Fargo on a different card, and but for this rewards points issue, I would be able to roll over the balance to a new card from a different company at 0% APR. Wells Fargo will call the entire balance for the second unrelated card due and charge penalties and interest for the entire 18 month "introductory" period if it's not paid by July.
If Wells Fargo does that, the additional charges will be about $5000, which with treble damages for false advertising, will result in my seeking the jurisdictional maximum of $12,000 in small claims.
Update #4: Experian refused to update the report after a FCRA dispute. I applied for three credit cards, all of which were refused.
I obtained a copy of their advertising, which states that rewards points can be credited to the customer's bank account and that the customer has the choice of how to spend the rewards. I also have their cardholder agreement contract, which states that Wells Fargo may close an account and seize rewards points from a customer for any reason or no reason at all (using that exact language).
If the letters state that the reason for the refusal was the wrongfully reported account, I will be suing for treble damages for violation of Pennsylvania's deceptive trade practices statute. As a fallback, I will state that the contract was unconscionable because the onesided ability to seize points for no reason makes it illusory. As an additional fallback, I will request statutory damages of $1000 per incident for violations of the FCRA should the other two causes of action be found to be invalid.
I will request the money, an order removing the false reports from the credit file, and an order barring Wells Fargo from advertising the rewards program in Pennsylvania.
The letters are expected to be received in 10 business days.
@SteveSokolowski Man, why are you doing this? Banks have armies of lawyers, they know what they are doing if they wrote that into a contract. Reward programs have been around for decades and if they were somehow illegal because the bank could do whatever they want with them, they would already have faced litigation.
Just take the L and move on. There are better things to do with your time and money.
@Shump The reason is that they are going to settle. Coinbase settled and paid interest and penalties when they didn't credit me with dogecoins I sent them. Square settled in regards to a case where they froze my account for 90 days. The City of Tallahassee will settle when they made a fraudulent withdrawal from my account even though I don't live in Florida.
They can pay their lawyers hundreds of thousands of dollars if they want - I don't care. Meanwhile, I can use Claude 3 to inundate them with motions, discovery requests, and other filings. Claude 3 costs $20/month. I'll keep doing this until they get tired of it. If I lose, it's not a meritless case, so there is no counterclaim or court penalty.
My guess is that you haven't been involved in civil cases often. One of the things you learn is that the civil court system in the United States is worthless. It exists to enrich lawyers and there are laws prohibiting certain parties, like LLCs, from representing themselves.
Claude 3 and GPT-4 are the great equalizers. Corporations are mandated by the law to hire lawyers. I can go pro se all I want. Claude, particularly, can churn out 6 pages of text in response to one prompt. It's a completely asymmetric battle, and I've been holding these companies to account and getting paid thousands of dollars in settlements.
Before GPT-4, I was quoted $800,000 to sue BlockFi CEO Zac Prince. Now, I can do it for the filing fee of $200. If Wells Fargo wants to go to trial against me, they're going to have to spend a quarter million, at least.
Update #3: Wells Fargo reported the account as delinquent to Experian.
I filed a dispute with Experian. Should the dispute not be resolved, I will apply for a mortgage to flip a house, which I had been planning to do. If I am declined, that will establish damages, and I will sue Wells Fargo for the jurisdictional maximum of $12,000 in small claims court, and the question will resolve as YES.
Update #2: Wells Fargo began sending automated letters stating that the account was past due. However, I have not received any legal notices and the account has not been reported to any credit agencies, so no litigation has commenced.
This is a "before" snapshot of my credit report. The score is only 722 because of the debt incurred from the BlockFi, Genesis, and Celsius cryptocurrency scams unrelated to Wells Fargo. You can see, however, that as of October 24, there is a lifetime record of zero missed payments.
@KevinLobLaw They did indeed cash the check, which I found interesting. They then called the next Monday and said I owed them to remaining balance, despite the check stating that it was to settle the debt.
I do plan to argue that in court if they sue, or if I need to sue them for a bad credit report.
@SteveSokolowski You can’t sue them for a bad credit report but can probably dispute it with the reporting agencies. Good luck though. Filing fee would be about what the debt is, hence my position as NO
@KevinLobLaw The argument I would make is that they knew the debt was not valid, so they filed an incorrect report in bad faith. The problem though would be proving what the damages are.
But I can walk a mile to the court office building to file a small claims case and dare Wells Fargo to pay a lawyer $10,000 to show up and fight - particularly if I sue for a small amount. I have nothing to lose because I'm not hiring a lawyer and it's not frivolous litigation. I've done it several times before when companies have pulled stuff like this on me, and none of them ever has.