Wells Fargo deliberately multiplied overdraft fees, cleared larger customer checks first. Judge orders it to pay $200 million in restitution.

Well, this may come as a surprise: a bank was deliberately charging customers for banking errors they did not make.

Shocker, huh?

Okay, well, maybe that kind of snark is a bit uncalled for. There are plenty of banks out there doing the right thing. But the timing of a California judge’s ruling that Wells Fargo must pay back more than $200 million to customers for egregiously fat-fingering their adding machines when calculating overdraft fees could not have come at a worse time.

News that the economic recovery is slowing (also quite the shock, huh?) and that unemployment continues to punish the nation has only exacerbated the nation’s mood toward the financial industry, largely considered the source of our current economic woes.

United States District Court Judge William Alsup ruled that Wells Fargo used an accounting tactic that literally multiplied one personal banking mishap into several, sometimes even 10. So, a $35 overdraft fee would wind up costing a customer $350 once totaled. What’s worse, the bank actually created a shroud around the practice, hiding it from customers and regulators.

Specifically, the bank would process checks for higher amounts first, regardless of when they were written. That means they would re-order the timeline of entry, resulting in more overdraft fees. In its defense, the bank said that larger checks are often the more important ones, like car payments and mortgage dues.

A banking and finance writer for the San Francisco Business Times described an industry conference years ago where banking executives were told that waiting on larger checks and then clearing them first was a sound way to increase bank revenue through overdraft fees. The speaker even mentioned that the tactic worked particularly well on military bases because customers in that demographic are often “struggling financially.”

All told, customers could have been bilked for much more, considering that the bank collected $1.8 billion in overdraft fees between 2005 and 2007. That’s billions. Now might more people understand the role some banks play in our nation’s personal debt pile?

These sorts of things tend to happen to people on or close to the edge of a serious financial headache. Checking accounts get hard to balance when jobs go away and kids still need shoes. More over, in today’s world of online banking and debit accounts, it has become even harder to track expenses, as some purchases record as debits in our accounts faster than others. We move so fast at check-out counters and Web sites that many people completely forget they purchased something until days later.

Our time is precious, to be sure, so we move faster. But isn’t our financial livelihood precious too?

Without argument, banks are a business. And, there are ways to not have to use a bank. But let’s be honest, the rest of the business world does not make it very easy. However, one would think that a business in the business of saving, growing and handling money would have a higher regard for the value of it to their customers. Perhaps that’s not the case anymore.

A financial analyst with an investment banking firm called FBR Capital Markets, said that Wells Fargo’s “method” of calculating overdrafts fees has been questionable for some time, illustrating that it has been “going on for years.”

With sweeping financial reform making its way around Washington and soon to a bank near you, overdraft fees, ATM charges, late fees and many other banking charges will be handled and disclosed in a much more overt fashion, according to those in the know. Basically, that just means it will become more expensive for you to use a bank.