- Report: #1192894
Complaint Review: Wells Fargo - Nationwide
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Wells Fargo
Nationwide, USA
Web:
www.wellsfargo.com
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Wells Fargo Read the fine print on your loan! Nationwide
Here’s a little consumer head’s up I’d like to give everyone. It involves shady lending practices by Wells Fargo.
A year ago, we purchased new carpeting for our house. The carpet company offered us 0% interest for 1 year and we took advantage of it. The loan was financed by Wells Fargo Bank. We make payments on the loan every month – flash forward 1 year. I go to pay off the balance as the term of the loan is up. It’s a few weeks after the end date and I figure I will pay a month’s interest – not great, but no big deal.
To my surprise, there is over $1700 in interest that’s suddenly been tacked on! I call immediately and it turns out that in the fine print, if you don’t pay the loan off completely, the charge you the ENTIRE AMOUNT INTEREST ACCRUED OVER THE YEAR – at 27%! And it doesn’t matter if you miss it by one day or have 1 cent left in the account. Boom! They got ya.
At no time were we apprised of this clause or were the terms explained to us. It’s seems like they are hoping you don’t notice it. On the phone they said there is nothing they can do about it - those are the terms, you signed it, tough luck. We stupidly assumed that this was like any other similar offer (like the ones we get every few days from Capital One, etc) where you START paying interest when the promotional period is over.
I think this is predatory and misleading. Take aways:
- Always read ALL the fine print on credit cards, small loans, etc.
- I had been warned about avoiding the big players: Wells Fargo, BofA, Chase as they are all part of the financial community that drove our economy off the cliff. Time to move to a local bank or credit union.
- Buyer beware. If you’re not paying attention, you’ll pay another way for sure.
1 Updates & Rebuttals
FloridaNative
Palm Beach Gardens,Florida,
All deferred interest loans are set up that way
#2Consumer Comment
Fri, December 05, 2014
I am not defending Wells at all. But all deferred interest loans are all set up the same way: you have a promotional period where the interest accrues but is not charged to you unless you fail to pay it off during the promotional period.
The kicker is this: the minimum monthly payment in the loan is designed to NOT pay off the loan during the promotional period.
So you are right, if you go one minute beyond the promo, you owe every bit of deferred interest. It is in writing in the loan you signed. That loan is designed to lull you into low payments so you lose track of the timing for payoff. In this type of loan, the interest rate is higher than in a normal financed purchase where you pay principal and interest monthly. The ad says "zero interest for X months" which is true, but only if you pay it off before the promo expires.
You see this type of loan for many home improvement type purchases especially big ticket items like furniture. It is a win-win for both the bank and the furniture or home improvement center.
It is a bad loan for consumers that choose not to read the loan or those that don't understand what they sign. Both the lender and the business offering the deferred loan product are counting on you not paying enough attention and therefore not paying off the loan before the promo ends. This is a true 'buyer beware' situation.
