Confronted with a little known clause to fend off lawsuits, an untold number of Wells Fargo customers in Arkansas and the U.S. are now faced with the possibility they will never be made whole financially following several violations that including setting up fake accounts.
Wells Fargo CEO Tim Sloan and other company executives have gone out of their way to make “we’re going to make things right” public apologies on Wall Street and social media platforms such as Twitter and LinkedIn.com, but some consumer advocate groups have criticized the financial conglomerate for saying one thing to customers and shareholders, but contradicting those same claims in pending federal lawsuits.
Others that have threatened lawsuits are now being told they will have to resolve the matter in private arbitration, although many don’t remember the small-print documents they signed or say the complex legal documents are often dozens of pages long.
In talking with class-action attorneys with past or ongoing complaints against Wells Fargo, Talk Business & Politics found that many seeking to sue the banking giant have lost their homes, seen their cars repossessed, were forced to renew their credit card terms at a higher interest rate with lower spending limits, or had to close their bank accounts due to the bank’s other illegal business practices.
In other instances, less affluent Wells Fargo customers who can’t afford litigation face the long and often frustrating process of working with the bank and credit reporting agencies to have their credit scores and financial well-being restored, said one attorney for a West Coast law firm that is participating in the fake account class-action settlement.
To help those customers, the Consumer Financial Protection Bureau (CFPB) put in place a new rule this year to ban banks from using mandatory arbitration clauses to deny groups of people their day in court.
“Arbitration clauses in contracts for products like bank accounts and credit cards make it nearly impossible for people to take companies to court when things go wrong,” said Richard Cordray, director of the consumer watchdog agency created by the Obama Administration after the 2008 financial crisis. “These clauses allow companies to avoid accountability by blocking group lawsuits and forcing people to go it alone or give up. Our new rule will stop companies from sidestepping the courts and ensure that people who are harmed together can take action together.”
Read more: http://talkbusiness.net/2017/09/arbitration-rules-deny-wells-fargo-consumers-day-in-court-cfpb-says/