Chutzpah: Wells Fargo Says Signatures It Forged Makes Contracts Legal, Victims Can't Sue

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I just read an infuriating article in Consumerist.

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.

Wells Fargo Scam Is Ugly Look Inside Big Banks

Wells Fargo bank got fined big time for widespread
corruption and hijinks, including opening
bank accounts with fees for customers who did
not ask for the accounts or want them.  

Maybe we should be putting our money under mattresses after all and avoiding banks, given the news about Wells Fargo this week.

Wells Fargo Bank is paying  $185 million in fines to various agencies for opening up millions of phony accounts for unwitting customers.

This wasn't just a few bad apples at Wells Fargo doing this. About 5,300 employees have been sacked for doing this, which means it was part of the bank's culture for doing this.

It looks like the trouble started when Wells Fargo brass instituted, shall we say, aggressive sales targets for its employees.

So aggressive that most of them figured they'd never make it to their goals. So they created fake email addresses to sign up customers for online banking services. Apparently, there were about 1.5 million - yes million - such accounts opened.

The emails were fake, but the customers were real. And these customers did not know they were being signed up. Or would be subjected to fees and such that would help make Wells Fargo big, fat, rich and happy. (Wells Fargo will have to repay these customers fees they paid for their unwitting accounts.)

About $100 million of the settlement went to the Consumer Financial Protection Bureau, Elizabeth Warren's favorite consumer protection agency which was created half a decade ago.

"Wells Fargo built an incentive-compensation program that made it possible for its employees to pursue underhanded sales practices, and it appears the bank did not monitor the program carefully," said CFPB Director Richard Cordway, as NBC news quoted.

I'm glad Wells Fargo is being called on their misdeeds, but as is usually the case when big banks or big businesses are up to no good, the top brass that condoned it are totally getting away with it.

It looks like the 5,300 or so people who were fired were pretty low level people. Maybe they deserved to be fired. But with that many people involved, Wells Fargo must have had a culture in which they did bad things to make profits.

Company culture usually comes down from the top. So why aren't the executives who had to know about this and did nothing still collecting nice big salaries at Wells Fargo?

It's not just envy of the fat cats that are getting away with this. We are all victims of this weird money making system.

As Douglas Rushkoff noted on CNN:

".......We are watching what we might call 'extreme capitalism' at work. Banks don't make money by creating value; they make money by extracting funds from anyone who wants to build a business or even just make transactions."

Rushkoff went on to explain that when the economy was growing vigorously, shareholders in banks were happy because the banks were making money through business loans and general commerce.

In the past decade, things have been slower, so to keep shareholders happy with every rising profits, banks like Wells Fargo try to make more money by issuing more credit cards with high fees and new loans with high origination costs.

So we're screwed. Because banks aren't really creating anything or helping anybody. They're just finding creative ways to transfer more wealth away from most of us, and concentrate it in their pockets.

I don't know if I agree with Rushkoff in the following or not, but his idea is intriguing:

"The only real solution here is for banks, like any business, not be required to grow. Banks, particularly savings banks, are more like utilities than businesses. With their monopoly power on the ability to issue currency, they are in a unique role to enable business of every other kind. This makes them at least as responsible to the public good as their shareholders.

By seeking to extract a higher percentage of our economic activity to pay for their financial services, they don't help anyone. Rather than promoting business, they serve as a drag."

Many conservatives and business types hate the CFPB, the consumer protection agency that is collecting fines from Wells Fargo and want to abolish it.

It's the agency I noted Elizabeth Warren loves.

The fines show that CFPB can help rein in the excesses of the banking industry.  Paying $185 million isn't a big deal for a behemoth like Wells Fargo. But the publicity sullies its reputation. The CFPB basically shamed Wells Fargo into behaving.

Sometimes a little public shaming is the best way to make people - and businesses behave.

If that doesn't work, maybe we should all withdraw our money and stow it under mattresses, I don't know.

Dear Wells Fargo: If You're Going To Demand Guy Pays His Bill, Make Sure He Owes You

Back in November, Dominic Maier of North Carolina started getting calls from Wells Fargo Bank demanding he start making his mortgage payments again. He owed them, he ought to pay.

Wells Fargo is being sued by a North Carolina man
because the bank has been too lazy or stupid, apparently,
to stop calling him about a mortgage he doesn't have.  

There's only one problem: Maier has no mortgage with Wells Fargo and has never done business with the bank, according to the Charlotte Observer. 

OK, that happens. Mistakes happen. No big deal. Somebody at the bank probably keyed in the wrong number during data entry, and mistakenly put in Maier's phone number. Easy to fix, right?

Not so, it seems when you're dealing with one of these huge banks. In a case unfortunately familiar to many, it seems once somebody puts your phone number in the system at these places, nobody is willing to get rid of it.

So Maier's cell phone kept ringing and ringing for months with Wells Fargo demanding he pay the mortgage. They kept asking for a man Maier never heard of. He asked Wells Fargo to stop calling. He put his phone on the "Do Not Call" list.

Still, the phone kept ringing. Predictably, he's suing.

Why, then, did the bank let this go that far? They could have easily investigated, figured out they were screwing up, and gone after the right person.  Instead, Wells Fargo is getting sued, again.

According to the Observer:

"This is not the first time Wells Fargo has been accused of repeated illegal phone calls. Well agreed to pay $17 million in 2012 to resolve a class action lawsuit claiming people received unwanted calls on their cell phones, causing them to incur charges.

The bank also pledged that it had set up a system to ensure people only received calls on their cell phones if they actively gave the bank permission to use the numbers."

Or not, apparently.

As is typical in these cases, the Charlotte Observer tried to get a comment from Wells Fargo, but were unsuccessful. Kind of a "f**k you from Well Fargo as they are apparently arrogant enough to figure they can do what they want with impunity.

Even if they screw up.

I hope Maier's lawsuit is successful. If somebody at Wells Fargo was too lazy to fix incorrect information and let a database error continually torture the guy with robocalls, they deserve punishment.

I've not been able to find anything on line,  in a cursory search anyway, why it is so difficult to get wrong information about oneself in some corporate database corrected.

This is how bad it gets: I was involved in a minor car accident in 2005. I was to get a small settlement from an insurance company for the damages to the car I incurred in the crash, which was the other driver's fault.

I'm still trying to collect. In 2007, I moved from the address I was at when the crash occured. Here it is seven (!!!) years later, and after repeated entreaties to get them to correct my address in their database, mail is still going to my old address.

So: Are some sectors of corporate American trying to set world records for stupidly or laziness.

You decide.

Read more here: http://www.charlotteobserver.com/2014/02/10/4681657/davidson-man-sues-wells-fargo.html#.UvpdMSgx_FJ#storylink=cpy