Wells Fargo Wants To Arbitrate Unauthorized Accounts Class Action

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Wells Fargo has asked a New Jersey federal court to compel arbitration in a proposed class action lawsuit brought by customers who allege the bank opened thousands of unauthorized accounts without their consent.

Last week, Wells Fargo argued that since the plaintiffs signed agreements with the bank on more than one occasion that “clearly and unmistakably” contain arbitration agreements, the dispute should not be allowed to proceed as a class action.

“If the court were to reach the question of whether plaintiff’s claims fall within the arbitration agreement, the answer would be that they clearly do,” Wells Fargo argued.

Lead plaintiff Lee Blanchard brought the proposed class action lawsuit against Wells Fargo in October after learning that a new unauthorized account was opened by the bank that caused overdrafts and the generation of unauthorized fees and penalties which were taken from his banking accounts.

Blanchard contends that the pressure on Wells Fargo employees to open multiple accounts for each customer led to misleading and fraudulent account activities that caused him and other customers to pay for monthly service fees on accounts they never authorized or wanted.

In September, Wells Fargo was fined $185 million in civil penalties for secretly opening millions of unauthorized deposit and credit card accounts that harmed customers.

The bank agreed to pay full restitution to all victims and a $100 million fine to the Consumer Financial Protection Bureau’s civil penalty fund as well as a separate $35 million penalty to the Office of the Comptroller of the Currency, and an additional $50 million to the city and county of Los Angeles.

The settlements, which the bank said it had made provisions for as of June 30, include an additional $5 million in customer remediation.

However, Wells Fargo argues that Blanchard’s claims for damages amid this scandal still fall under the arbitration agreements he reportedly signed.

“By basing his claims on the existence of bank accounts at Wells Fargo and on Wells Fargo’s alleged imposition of ‘unauthorized fees’ and ‘unauthorized fund transfers’ on those accounts, [Blanchard’s] complaint implicitly but necessarily relies on the agreements between plaintiff and Wells Fargo governing those accounts,” Wells Fargo said.

When Blanchard first opened a Wachovia bank account in 2007, he signed a document memorializing his agreement to terms and conditions that he and the bank would arbitrate their disputes.

When the Wachovia accounts converted to Wells Fargo bank accounts in February 2011, following Wachovia’s merger into Wells Fargo, Blanchard received a revised agreement from Wells Fargo stating that his continued use of the account would constitute his agreement to the revised terms, including a provision that all disputes with the bank would be arbitrated, Wells Fargo noted in its motion to compel arbitration.

Further, Wells Fargo says Blanchard committed a second time to arbitration with Wells Fargo in February 2014, when he opened a new savings account and signed an account application with a detailed agreement to arbitrate any disputes.

The Wells Fargo consumer Class is represented by Barry J. Gainey, Thomas J. McKenna and Gregory M. Egleston of Gainey McKenna & Egleston.

The Wells Fargo Unauthorized Accounts Class Action Lawsuit is Blanchard v. Wells Fargo Bank NA, et al., Case No. 1:16-cv-07509, in the U.S. District Court of New Jersey.