Arbitration Update

In a new arbitration update, six United States Senators have spoken out against the enforcement of Wells Fargo’s arbitration clause:

“A major reason that these outrageous practices continued for at least five years is that Wells Fargo’s customer account agreement includes a forced arbitration clause,” reads the letter. “These clauses eliminate consumers’ ability to bring a claim in open court or to band together in a class action, before any dispute has arisen. Forced arbitration clauses deny access to the courts even when consumers are seeking to enforce their rights under fundamental state and federal laws. Instead, consumers must seek justice individually, on a case-by-case basis in closed-door arbitration proceedings that are often stacked in favor of the corporate defendant.”

Given recent revelations that Wells Fargo opened fraudulent accounts for thousands of consumers who didn’t know or didn’t ask for them, it’s questionable whether the victims of this conduct will be able to seek relief in court.  As the Senators note in their letter to Wells Fargo CEO John Stumpf, https://consumermediallc.files.wordpress.com/2016/09/9-23-16-wells-fargo-letter-re-arbitration-final.pdf, “[T]his forced arbitration system helps hide fraudulent schemes such as the sham accounts at Wells Fargo from the justice system, from the news media, and from the public eye.”  That’s because arbitration filings and decisions are not matters of public record, as are court filings.

For more on the Wells Fargo scandal, check out the Consumerist piece at https://consumerist.com/2016/09/23/senators-to-wells-fargo-ceo-dont-strip-wronged-customers-of-their-day-in-court/.  And continue to battle back against forced arbitration – if you see an arbitration clause in new paperwork you’re asked to sign, cross it out and initial your refusal to be bound.