NEW YORK (CNNMoney.com) -- Wells Fargo was ordered to pay more than $200 million in restitution to California customers for manipulating and multiplying overdraft fees, a federal judge has ruled.
U.S. District Court Judge William Alsup of Northern California, in his 90-page ruling Tuesday, said Wells Fargo used "a bookkeeping device" that turned one instance of overdrawing an account into as many as 10, allowing the bank to multiply the number of fees it could collect from a single mistake.
"The bank went to considerable effort to hide these manipulations while constructing a facade of phony disclosure," he said.
The ruling said Wells Fargo (WFC, Fortune 500) must pay $203 million in restitution to California customers for its liberal use of $35 overdraft fees. This is a fraction of the $1.8 billion in overdraft fees that the bank collected in California from 2005 to 2007, according to the court.
"The revenue generated from these fees has been massive," wrote the judge.
The ruling concluded a two-week bench trial that ended May 7.
Wells Fargo spokeswoman Richele Messick said that her company was "disappointed" with the judge's ruling.
"We don't believe it's in line with the facts of the case and we plan to appeal," she said.
Paul Miller, analyst for FBR Capital Markets, said that Wells Fargo's handling of the overdraft fees was "always a questionable practice" that has been "going on for years."
But he said that in the future, bank fees are going to become "more up front than back door," especially in the wake of financial reform.
Aetna has struck a deal to buy rival health insurer Humana for $37 billion. More
Greece votes Sunday in a crisis referendum that will determine the country's future in the eurozone. The result is too close to call. More
Windows 10 will start rolling out slowly in waves, beginning on July 29. More
The most expensive schools in the nation are charging close to $50,000 a year in tuition and fees alone. More