Warren slams Wells Fargo over arbitration position

© Reuters. Senator Warren shows company documents to Wells Fargo CEO Stumpf at Senate Banking Committee hearing on firm's sales practices on Capitol Hill in Washington© Reuters. Senator Warren shows company documents to Wells Fargo CEO Stumpf at Senate Banking Committee hearing on firm’s sales practices on Capitol Hill in Washington

By Suzanne Barlyn

NEW YORK (Reuters) – Massachusetts Democratic Senator Elizabeth Warren on Monday criticized Wells Fargo & Co’s (N:) decision to require customers affected by its unauthorized accounts scandal to go through arbitration rather than allowing them to sue.

The San Francisco-based bank last week asked a U.S. court to uphold contract clauses that mandate arbitration, something financial firms often use to protect against litigation. Wells Fargo’s situation is unusual, though, because it opened accounts without customers’ permission, calling into question whether the contracts and their clauses are legitimate.

In a Facebook (NASDAQ:) post on Monday, Warren, a frequent critic of the banking industry, said Wells Fargo’s promise to treat customers better in light of the scandal is “meaningless” as long as it is pursuing arbitration.

“After dozens of Wells Fargo customers sued the bank to recover fees they were charged from these fake accounts, Wells Fargo tried to boot the claims from court and into the closed-door, industry-friendly arbitration process,” Warren said.

“Unfortunately, there’s a real chance a court will let Wells Fargo shuffle these claims off to die in arbitration.”

A Wells Fargo spokesman said the bank has an arbitration clause in its customer account agreements.

“In cases where customers have received a product that they did not want or authorize related to our recently-announced settlements, we are providing free mediation through an impartial third-party,” the spokesman said.

Last year, The bank successfully argued in another lawsuit that arbitration agreements customers signed when opening legitimate accounts extended to the unauthorized ones.

Warren also used her Facebook post to advocate for a rule proposed by the Consumer Financial Protection Bureau that would eliminate mandatory arbitration.

Before being elected to Congress, Warren was a vocal proponent of such an agency being created as part of the 2010 Dodd-Frank financial reform law. Some Republican lawmakers in newly powerful positions following the 2016 elections have pledged to eliminate it.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Let’s block ads! (Why?)

Stock Market News

You May Also Like

Leave a Reply