Updates to our Terms of Use

We are updating our Terms of Use. Please carefully review the updated Terms before proceeding to our website.

Thursday, March 28, 2024 | Back issues
Courthouse News Service Courthouse News Service

Judge Compels Arbitration for Wells Fargo

SAN FRANCISCO (CN) - A federal judge Wednesday granted Wells Fargo's request to compel arbitration in a class action accusing it of deceptively charging customers for "solutions" to nonexistent problems.

Lead plaintiff Shahriar Jabbari sued the bank in May, claiming it encouraged employees to use fraudulent and deceptive tactics to persuade customers to open fee-generating accounts by misrepresenting them or not informing them at all.

Wells Fargo called the tricks "solutions" and set "unrealistic sales quotas" for its employees, inducing them to add hidden fees and open unwanted second accounts for customers, Jabbari claimed.

U.S. District Judge Vince Chhabria on Wednesday found that Jabbari and other customers agreed to broad arbitration provisions when they opened their accounts.

"These provisions clearly assign arbitrability determinations to the arbitrator," Chhabria wrote in the 3-page ruling.

The judge found the arbitration provisions in Wells Fargo customer agreements were extremely broad, covering all issues relating to customer bank accounts.

"The misuse of information and funds associated with their accounts may 'relate' to the legitimate accounts, so Wells Fargo's assertion of arbitrability is not wholly groundless," Chhabria said.

He granted Wells Fargo's motion to compel arbitration and dismissed the complaint.

Categories / Uncategorized

Subscribe to Closing Arguments

Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.

Loading...