Wells Fargo seeks arbitration in lawsuit filed by Utah customers, plaintiff list grows

Wells Fargo branch in Logan, Utah, date not specified | The original uploader of this photo was Cornellrockey at English Wikipedia; transferred from en.wikipedia to Commons by Common Good using CommonsHelper., CC BY-SA 2.5, https://commons.wikimedia.org/w/index.php?curid=6223305; St. George News

ST. GEORGE – Wells Fargo & Co. wants a federal court judge in Utah to order that customers suing the banking giant over improper sales practices submit their claims to binding arbitration.

The lawsuit against the San Francisco-based company was filed in September by three Utah residents, Lawrence J. Mitchell and Kay Mitchell of South Jordan, and Matthew C. Bishop of Salt Lake County. The three at one time had accounts with the bank. The class action suit now names 80 plaintiffs, seven of them described as Utah residents with others being from numerous states, and includes an allowance for 1 million more “Doe” plaintiffs.

The action was filed one week after the bank made headlines for agreeing to pay $185 million to settle allegations that its workers opened millions of accounts without customers’ permission to reach aggressive sales targets.

The class’s 54-page complaint claims breach of contract, fraud and other causes of action, many of which stem from allegations of overly-aggressive or improper product selling tactics engaged in by Wells Fargo including opening accounts and the like in the plaintiffs’ names without their knowledge or consent.

Read the complaint: Second Amended Complaint – Mitchell v Wells Fargo – Filed Nov. 3, 2016.

In a filing Wednesday to U.S. District Judge Clark Waddoups, Wells Fargo asserted that the plaintiffs agreed to submit any disputes to arbitration when they signed up for Wells Fargo checking accounts, credit cards or other services.

While plaintiffs have yet to argue against Wells Fargo’s motion for arbitration, their complaint claims Wells Fargo hid arbitration clauses deep within boilerplate documents in some cases, that arbitration clauses are not present in all of the plaintiffs’ agreements and that plaintiffs did not bargain for arbitration.

The lender asked the court to allow it to gather more information on 22 of the plaintiffs so that the company can determine whether they should also be included in its request to have plaintiffs’ claims deal with via arbitration.

Additionally, Wells Fargo asked Waddoups to dismiss the lawsuit, in case the company’s bid for an arbitration order fails.

The court gave Wells Fargo until Nov. 24 to respond to the amended complaint. As this report publishes, any response filed is not immediately available.

The lawsuit is just one example of the extent of the fallout over Wells Fargo’s sales practices scandal, which led to the abrupt retirement this month of the bank’s CEO, John Stumpf. Wells Fargo also faces several other lawsuits, as well as criminal investigations by the Department of Justice and the California Attorney General’s Office.

Well Fargo was also a party defendant to a class action suit that resulted in a $25 billion national mortgage settlement that Utah and other states entered into with mortgage servicers in 2012. That action originated with allegations that the banks involved issued improper mortgages, premature and unauthorized foreclosures and engaged in other misconduct.

The Associated Press’s business writer ALEX VEIGA contributed to this report.

Email: [email protected]

Twitter: @STGnews

Copyright 2016 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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  • Utahguns November 27, 2016 at 9:49 am

    So when a financial institution willfully misrepresents, defrauds, and outright lies to it’s customers, they want arbitration?

    Wells Fargo, whom I’ve refused to do business with since 1997, should bear the full brunt of penalties brought against them. They are not immune from prosecution. They should not be given any consideration for reduced penalization.

    • BIG GUY November 27, 2016 at 1:30 pm

      The reason Wells Fargo and other companies require customers to agree to arbitration is exemplified by your polemic above. Juries are all too prone to award punitive damages far in excess of actual damages suffered solely because they want to punish corporate wrongdoers and jurors see this as their chance to strike back at big business. In fact, it is the company’s current shareholders who are punished, not those who instigated the fraud. If company employees committed fraud, they should be prosecuted. Companies are sued because they have deep pockets while proving a case against an individual employee requires a lot more work by prosecutors.

      Arbitration is not absolution. Arbitrators are impartial, selected jointly by both plaintiff’s and defendant’s attorneys, and if damages are determined, will award appropriate remuneration and damages. An arbitrator is much more likely to determine real damages while a jury trial unjustly enriches plaintiff’s attorneys who have been busy searching for plaintiffs who often have suffered little real damage. The history of asbestos litigation is rife with self-dealing plaintiff’s attorneys enriching themselves, a number of whom have been disbarred and prosecuted.

  • .... November 27, 2016 at 7:13 pm

    Big Guy. you pretty much said it all right there. them awards being handed down by juries got to be out of line

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