Why Wells Fargo Gets Away with Ripping off Customers
Wells Fargo has been going to great extents to clean up the public relations nightmare that they created by illegally creating over 2 million accounts that customers did not authorize.
Now, Wells Fargo customers have opened a class action lawsuit against the bank for the fraudulent activity.
Wells Fargo is fighting back reminding customers and their attorneys that the bank’s fine print is their friend. Tucked away in that customer agreement that every customer signed is an arbitration agreement. This handy agreement states that any grievance is settled by the use of arbitration.
Why is this significant?
First, arbitration more times than not favors the side of the bank rather than the customer. Second, the settlement is so small that most attorneys don’t want to hassle with it. Third, it is done privately behind closed doors. This eliminates the optics of a nasty court battle.
What if you knew you couldn’t get sued and if you got caught the punishment would be a small settlement? There is nothing that holds the big banks accountable.
Now the politicians are getting involved. They want to pass the Justice for Victims of Fraud Act of 2016. This would enable the customers to have their day in court. I love the showmanship of politicians. However, this is only a band-aid. How about the politicians putting their big boy pants on and disallowing the use of arbitration contracts for the big banks? Further, how about the politicians passing legislation that truly punishes a bank if they get out of line.
So this begs a series of questions.
Is it really the fault of the arbitration clause or does it come back to the politicians who are looking the other way while neglecting the duty to protect the consumer? After all, those big banks sure are helpful come re-election time.
Did these customers really suffer financial hardship because of the opening of an account? Until proven otherwise, this seems like a frivolous lawsuit.
Should the politicians be allowed to force an institution to lose the right to a provision of a contract that was previously signed?
Funny that it always seems to come back to the politicians.
Drain the swamp President elect Trump, Drain the swamp!