The appellate court identified that Wells Fargo sequenced the debit card transactions of its customers from highest to lowest, to generate overdraft fees.
The banking firm had told customers that their debit card purchases would be posted chronologically to their accounts.
Lieff Cabraser Heimann & Bernstein chairman Michael Sobol said: "For seven years, Wells Fargo has sought to defend its misrepresentations as to how it imposed overdraft fees on debit card purchases – all for the purpose of boosting its bottom line.
"Over one million California consumers are entitled to relief. They should not have to wait any longer for Wells Fargo to return their money."
The Ninth Circuit held: "[T]he restitution award was based on Wells Fargo ‘affirmatively misleading the class,’ a state law claim, not a ‘practice protected by federal preemption.’"
Wells Fargo’s California customers who incurred overdraft fees on debit card transactions from 15 November 2004 to 30 June 2008 have brought up the case before Alsup.
In August 2010, Alsup said that Wells Fargo made misleading statements to consumers, to maximize overdraft fees and it had significant impact on the bank’s low income customers.
A month later, Wells Fargo approached the Ninth Circuit Court of Appeals and in December 2012, the appellate court had upheld Alsup’s order, and placed the case in remand for further proceedings at the district court.
