By Chris Dolmetsch and Laura J. Keller
November 25, 2016
Wells Fargo is calling for dozens of customers suing over bogus accounts opened by the bank’s employees to resolve the dispute through arbitration rather than federal court.
The lender also asked for the lawsuits, filed by 80 customers in Salt Lake City, to be thrown out. Wells Fargo noted in a filing Wednesday that a judge in a similar class-action lawsuit in Northern California has already ruled that arbitration agreements can be enforced.
The San Francisco-based bank has faced a torrent of criticism and the ire of regulators after agreeing to pay $185 million in September to settle claims that employees opened potentially more than 2 million unauthorized accounts. It fired 5,300 workers over five years. John Stumpf resigned as chairman and chief executive in the wake of the scandal. Carrie Tolstedt, the executive in charge of the community banking unit, retired this year.
Three Utah customers sued in September shortly after the settlement was announced and blamed the scandal on the lender’s push to increase the number of accounts held by clients. That strategy, called cross-selling, is designed to boost the number of accounts on which the bank can collect fees. Wells Fargo vowed to eliminate sales goals linked by regulators to cross-selling.
The plaintiffs in the Utah lawsuit seek to represent other customers in a class action and to recover at least $5 million in damages from the bank. They said the company also should have to pay punitive damages for its failure to alert customers to the abuses for more than a year after it was sued by the Los Angeles city attorney.
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