Originally published by Beth Graham.
Last week, San Francisco-based bank Wells Fargo reportedly asked a federal judge in Utah to send a proposed class-action lawsuit that was recently filed against the company to arbitration. In Mitchell v. Wells Fargo, No. 2:16-cv-00966-CW-DBP (D. Utah), several dozen bank customers accused the company of breach of contract, fraud, and numerous other causes of action after bank employees allegedly opened thousands of unauthorized accounts on behalf of unwitting customers. In addition, the bank also purportedly charged many of the customers a variety of fees associated with the unapproved credit and deposit accounts.
Earlier this year, Wells Fargo received approximately $185 million in fines related to the fraudulent customer accounts and agreed to issue a refund of customer fees totaling about $2.6 million. Additionally, the bank told lawmakers it would provide free mediation services to all affected customers.
Wells Fargo admits that about 5,300 bank employees and managers were terminated over the last five years for utilizing improper sales tactics such as opening unauthorized customer accounts. The bank has also reportedly began an advertising campaign designed to win back customers who left over the deception.
In the bank’s motion to compel arbitration, Wells Fargo argues the dispute should be arbitrated since each customer signed a mandatory arbitration agreement when opening his or her initial account. Because the lawsuit relates to unauthorized customer accounts, however, it will be interesting to see whether the judge will grant Wells Fargo’s motion.
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