Wells Fargo seeks arbitration with customers, dismissal of suit - Kogonuso


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Nov 27, 2016

Wells Fargo seeks arbitration with customers, dismissal of suit

By Allen Cone

Wells Fargo Bank has asked a federal judge to dismiss a class-action suit filed by customers and instead order private arbitrations. File photo by Vividrange/Shutterstock

Wells Fargo wants a federal court to dismiss a class-action lawsuit by customers over the bank's unauthorized accounts and instead compel the to settle the in private arbitration.
The San Francisco-based banking giant filed the motion in Utah on Wednesday.
It's the first class-action lawsuit filed after Wells Fargo agreed to pay $185 million in penalties and $5 million in customer reimbursement after opening 2 million accounts without customers' authorization.
In September, Wells Fargo settled with the Consumer Financial Protection Bureau, the U.S. Comptroller of the Currency and the city and county of Los Angeles.
Wells Fargo says the class-action suit is an "unwieldy" case of 80 customer-plaintiffs and 17 legal causes of action against the bank.
In a statement, Wells Fargo said it makes "every attempt" to resolve complaints directly with customers before going to arbitration.
The bank said it's offering "fast and free" mediation to customers through an impartial third party.
Zane Christensen, a lawyer representing customers in the suit, said it will "vigorously defend" against the bank's motion.
"Wells Fargo isn't concerned about making things right with their customers. Wells Fargo is worried about making things right in public relations," Christensen said.
The bank has been criticized for its mandatory arbitration clauses, including by Sen. Elizabeth Warren, D-Mass.
The Consumer Financial Protection Bureau is considering rules to prohibit banks, credit-card issuers and other companies from forcing customers to submit to arbitration and waive their right to join class-action lawsuits. But President-elect Donald Trump and a Republican-led Congress might scale back its regulations.
The suit says bank employees were pressured to meet escalating sales goals.
"Wells Fargo's managers and bankers have for years engaged in unethical, and illegal practices called 'gaming,'" the suit argued. "Gaming consists of, among other things, opening and manipulating fee generating customer accounts through often unfair, fraudulent, and unlawful means, such as omitting signatures and adding unwanted secondary accounts to primary accounts without permission. Other practices utilized as part of these 'gaming' schemes have included misrepresenting the costs, benefits, fees, and/or attendant services that come with an account or product, all in order to meet sales quotas."

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