Banking giant Wells Fargo is attempting to sidestep a multitude of fraud lawsuits by forcing banking customers instead into private arbitration. Under the bank’s widely-reported false accounts scandal, some two million sham accounts were opened under customers’ names without their knowledge or consent. As noted by the New York Times, “This is not the first time Wells Fargo has been accused of trying to use arbitration to its advantage.”
If Wells Fargo is successful in its attempts to move these cases into private arbitration, customers will be denied their right to trial in open court. Arbitration is widely seen to favor corporations over individuals, who find themselves deprived of their basic constitutional rights to justice when something goes wrong. These clauses “prevent consumers from banding together to file a lawsuit as a class, forcing them instead to hash out their disputes one by one and blunting one of the most powerful tools that Americans have in challenging harmful and deceitful practices by big companies,” explained The Times.
Further, strict judicial rules limiting conflicts of interest also do not apply in arbitration, enabling some companies to steer cases to friendly arbitrators, according to a 2015 investigation by the Times. Although arbitration may be less costly than a court case, according to the St. Louis Post-Dispatch, “a class action is, practically speaking, the only way to find justice for people.”
There has been widespread use of arbitration agreements by companies against consumers in the wake of 2011 and 2013 rulings by the Supreme Court that allowed for greater use of the arbitration mechanism. “Wells Fargo’s legal success shows the overwhelming power that arbitration clauses have in shaping disputes between everyday Americans and huge corporations,” concluded The Times.
Consumer Rights Attorneys at Lieff Cabraser
False advertising, bait and switch marketing, phony disclosure of manipulative bookkeeping devices, unconscionable pricing, and charging for services never provided are some of the many unfair and deceptive practices rogue corporations use to defraud consumers.
Lieff Cabraser advises consumers as well as businesses whether and how to pursue legal action to halt and obtain compensation for the deceptive practices of large corporations. With a blend of courage, superior legal skills, and high principles, we protect our clients’ interests and help them achieve their goals by winning highly-complex consumer protection lawsuits against those that have defrauded consumers.
We have successfully prosecuted scores of consumer class action lawsuits against many of the largest U.S. banks, financial service companies, and corporations. Working with co-counsel, we have achieved judgments and settlements in excess of $3 billion for consumers in these cases. Learn more about Lieff Cabraser’s work prosecuting cases on behalf of consumers throughout the U.S.