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.
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