Remember that whole thing a year or so ago when we learned Wells Fargo opened a whole bunch of fake accounts so that employees could make sales goals?
People suddenly had Wells Fargo accounts that they didn't seek and didn't want, and were subject to fees on those accounts. Wells Fargo employees forged signatures of these customers to establish the accounts.
As you might expect and remember, this was a huge scandal. More than 5,000 low-level employees were fired, as were four executives. Even then, a lot of people understandably wanted further repercussions against Wells Fargo.
Another non-surprise is that people who had been signed up for these fake accounts are suing Wells Fargo, or intend to.
Here's where it gets infuriating. Most banking transactions - credit cards, bank accounts, that type of thing - have contracts that have an arbitration clause.
What that means is when you sign up for an account or a credit cart through a bank, you sign a contract that says if you are dissatisfied, you agree to go through arbitration rather than sue the bank.
Of course, the deck is stacked against you through that system, since the arbitration is set up by the bank, which has an interest in siding with the bank if there is a dispute.
But that's not the heart of the infuriating thing here.
According to Consumerist, to fend off lawsuits over all those thousands of fake accounts, Wells Fargo says that since the contracts in the fake accounts are subject to arbitration, the victims have to go through that arbitration.
Remember, the victims didn't sign these contracts. Wells Fargo forged them. Wells Fargo is essentially claiming that the forged contract are legally binding, which is a novel approach to the law.
In a statement to Consumerist, Wells Fargo wrote this gem:
"Our goal is to do what's right for every customer and team member, every day. If we are unable to resolve a dispute directly, arbitration is a forum in which a customer or a team member dispute is heard and resolved with a neutral third-party legal process. Arbitration is generally faster and less expensive than litigation. It is a fair, efficient and effective forum availale for a customer and a team memger to purseu and resolve a legal claim."
Yep, Wells Fargo is telling the victims of the fraud that they're doing them a favor by trying to deny their day in court. And remember, Wells Fargo isn't offering the arbiration as a voluntary alternative. They want to require it.
Besides, as Consumerist points out, the legal trouble will involve a class action lawsuit. That means lawyers will handle things for the victims and the people who were defrauded by Wells Fargo will not have to go through the time ane expense of going to court, meeting with lawyers, depositions, etc.
If Wells Fargo requires arbitration, then each victim will have to go individually to arbitration, and gather up all their information and attend hearings and that sort of thing. That's not exactly easier than the class action lawsuit, where the victims can just wait and home and see how the legal battle plays out.
Lawuits against the bank are on hold while judges decide whether they should be combined into one gigantic class action lawsuit, or whether everybody should be forced into arbitration, the way Wells Fargo wants.
The second question shouldn't even be up for consideration, but that's the way things are nowadays. More often than not, corporations get to choose what they want, and the hell with the rest of us.
A consumer group called We Do Count is urging the courts to throw away this stupid arbitration effort.
Additionally, six U.S. Senators (led by Vermont's own Patrick Leahy, yay!) are urging Wells Fargo to knock it off with this arbitration idea.
I guess we have to wait and see whether corporate fraud wins in the end.