Lieff Cabraser Civil Justice Blog
Wells Fargo Loses Arbitration Big Over Deceptive Overdraft Fees

Wells Fargo Loses Arbitration Bid Over Deceptive Overdraft Fees

Mega-bank Wells Fargo has lost a bid to force multidistrict class action over overdraft fee abuse claims into arbitration. The San Francisco-based bank is dealing with numerous lawsuits accusing it of manipulating debit card purchases to maximize overdraft fee revenue in violation of consumer protection laws. Law360 has reported that “the bank has moved to compel arbitration several times with regard to two cases that originated in Florida and California.”

Rather than posting a customer’s transactions in chronological order, Wells Fargo allegedly deducted the largest charges first, drawing down available balances more rapidly and triggering a significantly higher volume of overdraft fees. With respect to the California case, over six years ago, in August 2010, U.S. District Court Judge William Alsup ordered that Wells Fargo return approximately $203 million to its customers in restitution for their abusive and deceptive accounting practices. That case is Gutierrez v. Wells Fargo Bank.

Law360 reports that despite the judge’s order, Wells Fargo continued their attempt to escape judgment by filing appeals, responding in an untimely manner, and reversing portions of the judge’s order, in addition to requesting mandatory arbitration multiple times to supplant the court’s judgment.

Quoting Judge James Lawrence King in the Florida case, Law360 noted, “Under the circumstances, it would be unfair, and fundamentally at odds with the principles underlying the Federal Arbitration Act, to permit Wells Fargo to invoke arbitration, after years of litigation, now that the alternate path the bank chose did not turn out as it had hoped. This logic applies with equal force to the class as it did to the named plaintiffs.”

Federal Court Bank Overdraft Fees Multi-District Litigation

Lieff Cabraser serves on the Plaintiffs’ Executive Committee in multi-district litigation against the nation’s major banks for the deceptive practice of misleading customers by the imposition of fraudulent overdraft fees.

About Lieff Cabraser and Consumer Protection

False advertising, bait and switch marketing, phony disclosure of manipulative bookkeeping devices, unconscionable pricing, and charging for services never provided are some of the many unfair and deceptive practices rogue corporations use to defraud consumers.

Lieff Cabraser advises consumers as well as businesses whether and how to pursue legal action to halt and obtain compensation for the deceptive practices of large corporations. With a blend of courage, superior legal skills, and high principles, we protect our clients’ interests and help them achieve their goals by winning highly-complex consumer protection lawsuits against those that have defrauded consumers.

We have successfully prosecuted scores of consumer class action lawsuits against many of the largest U.S. banks, financial service companies, and corporations. Working with co-counsel, we have achieved judgments and settlements in excess of $3 billion for consumers in these cases, including over $200 million in lawsuits over abusive and harassing robocalls and text messages brought under the Federal Telephone Consumer Protection Act.