September 6, 2012
Veterinarians recount ordeals with major lender
Wells Fargo strives to 'serve as a trusted advisor to veterinarians'
By: Jennifer Fiala
For The VIN News Service
Mention a certain lending institution known for extending practice loans to veterinarians, and Dr. Christina Barnett bursts into laughter.
It’s soon apparent that her amusement covers layers of dismay and frustration. Barnett, owner of a 24-hour emergency practice in Windham, N.H., is struggling. She hasn’t pulled a paycheck in the three years since opening in August 2009, despite 80- to 100-hour workweeks. Right now, she’s looking to refinance her property and business loans, and there’s one bank she’s sure not to try.
That’s Wells Fargo.
Barnett doesn’t blame Wells Fargo for her current financial woes — a slow economy and high payroll expenses are enough to impede on profits. But like a growing number of her colleagues, she says starting her business with Wells Fargo was a “nightmare.”
In a discussion on the Veterinary Information Network (VIN), an online professional community and parent of the VIN News Service, Barnett described her dealings with Wells Fargo as “atrocious.” Her statements mirror those of a dozen or more veterinarians who, on the message boards of VIN, cite similar experiences.
“I must have had 10 different contact people in the last three years, and none of them communicated with each other,” Barnett said of Wells Fargo. “My builder actually considered quitting because they were so hard to deal with on his end.”
In response, Wells Fargo officials stated that the company does its best to deal one-on-one with customer issues but declined to discuss with the VIN News Service specific complaints.
Wells Fargo began working with veterinarians, as well as dentists and physicians, in 2007 after it had acquired Matsco, a niche lender for medical professionals.
Wells Fargo noted that it is the only veterinary practice lender recommended by the American Animal Hospital Association (AAHA). When asked how Wells Fargo became an AAHA Preferred Business Provider, association leaders did not say. Generally, companies in the program pay the organization annual fees in exchange for brand marketing by the association.
In an emailed statement, AAHA Executive Director Dr. Michael Cavanaugh said only that the decision wasn’t made lightly.
“The American Animal Hospital Association is very particular about our preferred provider program," he wrote. "We have a very limited number of these relationships, and we monitor the programs on an ongoing basis in an effort to ensure our programs are the best option for our members. It would not be appropriate for AAHA to comment on a specific experience an individual had with a particular company when so many variables are in play.”
Wells Fargo isn't commenting on specifics, either. A general statement by Wells Fargo provided to the VIN News Service reads: "... When we learn of a customer issue, we take the time to understand what happened and determine how we can improve the situation for the customer today and going forward."
“It’s important for us to deliver the best possible service to our customers. If we fall short for some reason, we focus on resolving the issue and improving our service," the statement continues. “... We’re committed to improving the service we deliver our customers, and we do that by listening to them, understanding their needs and providing the solutions, resources and support they need to be successful.”
On VIN, some veterinarians view such promises as corporate lip service.
Dr. Eric Clanton’s biggest problem with Wells Fargo is that “nobody seems to know what anybody else is doing.” The veterinarian from Jacksonville, Ala., used the lender to finance his practice in April 2010.
“You get constant runaround,” he said. “The last time I had to deal with them, I spent three hours on the phone and talked to eight or 10 different people. I finally hit a dead end with voice mail. That person did call me back, but it was utter confusion.”
Another veterinarian, Dr. Eric Orr, said he is mystified by Wells Fargo’s agenda. In 2007, he purchased a practice in Florida and procured a loan for it through what at the time was Matsco. When the economy tanked in 2008, he fell behind on payments even though the practice grossed $500,000 annually — earnings that Orr assumed could save the practice provided he could restructure his Wells Fargo debt.
But bargaining with Wells Fargo to stay in business proved a losing battle, Orr said. Ultimately, the bank turned down the veterinarian’s attempts to negotiate and buy out the practice. “We had excellent cash flow, and I had two banks that wanted to finance the buyout,” he said. “They turned down my offer of $200,000 cash.”
Wells Fargo sued the veterinarian in federal court — a move that pushed him into a no-assets bankruptcy. The bank then sold the practice’s equipment on Craigslist.
Orr speculates that the practice was liquidated rather than saved via renegotiation so that Wells Fargo could write it off as a loss and “somehow manipulate its stock price.” Months after the foreclosure, Orr still hears from Wells Fargo — just not from its practice finance division.
“I’m still getting letters from them asking why I don’t have insurance on the practice,” he said.
Barnett, the struggling practice owner in New Hampshire, has a different series of Wells Fargo blunders to relay. One instance involved a case of mistaken identity in which a bank representative shared details about Barnett’s personal finances with a receptionist at a practice where she’d worked years prior to applying for a Wells Fargo loan.
Another snag occurred on March 5, 2009 — 24 hours before Barnett was scheduled to close on financing for her practice.
“My attorney and I had been trying for weeks to contact the bank about closing, asking: ‘What’s going on? Do you have the paperwork you need?’” she said. “No one would call us back. The day before we were supposed to close, they called and said we were missing documents, and we needed another $30,000 for our down payment. We had the builders and everyone waiting to break ground, and this pushed things back a week.”
Presented with Barnett’s experience, officials with Wells Fargo declined to address the situation but invited veterinarians to email the company at email@example.com with their concerns or grievances.
Owing to a notion that disgruntled customers tend to be the loudest, Wells Fargo shared results of a 2011 survey of its practice finance customers. Out of 110 responses, 90 percent of the respondents agreed or strongly agreed that employees with the division were responsive to their needs, “providing clear and concise information about the transaction process and met their expectations.”
“Wells Fargo is a relationship-based lender,” the company said in its statement. “Many of our veterinary practice customers start as personal banking customers who work with bankers at local banking stores. When a veterinarian is ready for specialized practice financing, whether it’s for purchasing a practice, expanding or updating an office or refinancing business debt, we bring in our practice finance team to serve the customers’ additional financial needs.”
At least one veterinarian on VIN noted that she’s had a “neutral” experience dealing with Wells Fargo. She could not immediately be reached.
Clanton, the veterinarian in Jacksonville, Ala., believes that the bigger the bank, the bigger the problems.
At the same time, he appreciates that Wells Fargo lends to veterinarians at all. Small banks and credit unions often don’t specialize in loans for veterinary practices, he said.
“Most local banks aren't keen on loaning you money to buy a practice on goodwill,” Clanton said. “If you need more money than your real estate and equipment is valued at, local banks are slower to help.”
Veterinarians' complaints about Wells Fargo aren't limited to practice financing. On the home mortgage side, Dr. Margaret Hammond in Burien, Wash., is celebrating after consolidating her Wells Fargo loans with a local credit union. In an interview with the VIN News Service, Hammond explained that she had two Wells Fargo mortgages on her home, one with a $15,000 balloon payment. After spending years carefully paying each of the loans via separate checks and payment slips to ensure she would pay off the balloon mortgage before it matured, Hammond discovered that Wells Fargo reallocated her payments and applied them to her longer-term mortgage with the lower interest rate.
In essence, she’d done nothing to pay down the loan before the balloon payment came due.
“I went ballistic,” Hammond said. “Nobody at Wells Fargo could explain to me why they had applied those payments to the mortgage with the lower interest rate despite the fact that I’d been sending separate checks in separate envelopes with separate payment slips. Fortunately, we were able to refinance with our credit union and drop Wells Fargo. I’ll never touch Wells Fargo for anything again.”
VIN News Service commentaries are opinion pieces presenting insights, personal experiences and/or perspectives on topical issues by members of the veterinary community. To submit a commentary for consideration, email firstname.lastname@example.org.
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