Wells Fargo attaches strings to free accounts for seniors

Wednesday, June 3, 1998 | 10:32 a.m.

Wells Fargo Bank, which has honored free checking accounts for all seniors who were former First Interstate customers, is ending that policy this summer.

Beginning July 1, those customers will pay a monthly fee of $9 unless they sign up for direct deposit of their Social Security checks or maintain a daily minimum balance of $1,000 or link their checking account with a savings account and keep a minimum balance of at least $3,000.

Wells Fargo purchased First Interstate in 1996.

Bank spokeswoman Kim Kellogg in California said Tuesday the letter went to no more than 150,000 checking account customers, about 3 percent of the bank's 5 million checking accounts.

Bryan Waters, division manager for Wells Fargo in Las Vegas, confirmed the policy will apply to the bank's Nevada customers, but said Wells Fargo will work with seniors to help them retain free banking privileges.

"There are many different ways to continue to have a free account," Waters said.

At least one Sacramentan is angry at the change, accusing Wells of reneging on an agreement after purchasing First Interstate in 1996.

"My agreement with First Interstate was this would be free for my lifetime, and Wells Fargo said any agreement I had with First Interstate would be honored," said Bruce Freeman, a 62-year-old retired teacher. "Now they are reneging."

In 1991, First Interstate offered the free checking for life to anyone 55 years or older, Freeman said. He signed up and had the free checking for five years and for the two years since Wells Fargo acquired First Interstate.

"We were transitioning customers from products First Interstate had, trying to give them an equivalent product," said Kellogg, head of the bank's media relations office. "We didn't have a free checking product, but we offered them free checking."

Now, after reviewing its portfolio two years later, the bank has opted to impose requirements, such as a minimum balance, for continued fee waivers, Kellogg said.

The letter, sent to customers May 28 by Jim Ketcham, an executive vice president, said the bank had reviewed its fee waiver policies and "decided to discontinue the arrangement that provided you with a fee waiver."

The accounts will now be subject to "normal" service fees of $9 a month or $7 if the customers use direct deposit.

Kellogg said that banks throughout the country have disclosure statements that allow them to change terms at any time.

She said the letter contained an "oversight," failing to note that customers with direct deposit of their Social Security checks would be exempt from the fee. The $7 fee still applies to direct deposit of other checks, such as employer paychecks, she explained.

Waters noted that the federal government will begin requiring direct deposit of Social Security checks next year.

Meanwhile, an official with a public interest group critical of rising bank fees lashed out at Wells Fargo.

"It sounds like a subtle bait and switch," said Jon Golinger, consumer program director with CALPIRG, an organization that has produced a series of bank fees studies over the past decade.

"You offer a customer one deal and then over time change the rules in the middle of the game," Golinger said.