We DO Count!

 
"Here's why Wells Fargo forces its customers into arbitration: It wins most of the time"
Los Angeles Times
By Michael Hiltzik
April 7, 2017
 
"The insistence by Wells Fargo that the victims of its bogus account-opening scandal seek redress via arbitration, rather than in court, remains the best indication that the bank’s promise to 'make things right' for those customers is fake.

A new study shows just how advantageous arbitration has been for Wells Fargo. Short answer: For the bank, it’s been great.

Wells Fargo -- the scene of the crime.
The study comes from Level Playing Field, an Arizona nonprofit that maintains a database of arbitration awards. The group mined records of 215 cases filed against Wells Fargo in 2009-2016 for its report. Its core finding is that of 48 consumer-initiated arbitration cases that resulted in a financial award, consumers won a documented victory in only seven, collecting a total of $349,549. The bank prevailed in 13 cases, collecting $485,208. Records for the other 28 cases don’t identify a winner, but in those cases Wells Fargo was awarded $519,458 by the arbitrators, while the consumers received only $82,527....

Arbitration statistics have their limitations, but those just explain further why forced arbitration tends to be anti-consumer. Unlike lawsuits, the cases aren’t public, so they yield almost no information about the nature of the customer complaints or their magnitude. It’s possible, for example, that banks settle cases they believe will go against them, and pursue to the end only cases they feel they’re likely to win. Of the 215 cases in the report database, 119 were settled before they reached an arbitrator, 25 were withdrawn by the plaintiff and 23 were dropped for other reasons. The absence of a public record may have allowed the Wells Fargo scandal to persist for years out of public view....

Wells Fargo’s policy of forcing aggrieved customers into arbitration has benefited the bank in other ways, beyond reducing its risk of payouts.

'The Wells Fargo situation illustrates exactly what is wrong with contemporary arbitration law,' says David Horton, an arbitration expert at UC Davis law school. Arbitration clauses typically are buried within account agreements, where customers’ eyes skate over them. The Wells Fargo clause covers not only the specific accounts being opened, but almost any disputes with the bank, even those involving 'broken promises … or other wrongful actions.'

Especially egregious, Horton says, are clauses in the Wells Fargo agreement and others that forbid customers to file class-action lawsuits or to band together with other customers in class actions in arbitration.

'There’s no question that requiring customers to pursue their claims individually means that fewer claims are brought,' Horton says, 'and companies like Wells Fargo aren’t deterred from violating the law.'"

Read more: Los Angeles Times: "Here's why Wells Fargo forces its customers into arbitration: It wins most of the time".

Fed up with Wells Fargo's abusing a system that's rigged against you? Make the switch! Say farewell to Wells Fargo. Here's how.

Read the full report, by Level Playing Field - commissioned by the CARS Foundation and also reviewed and confirmed by a researcher at UC Hastings College of Law.
 
"Wells Fargo tries, fails to explain why customers shouldn't be allowed to sue over fake accounts"
The Consumerist
By Chris Morran
March 1, 2017
 
"Wells Fargo has admitted that thousands of its employees opened fake, unauthorized accounts in customers’ names, but the bank is doing everything it can to prevent these wronged customers from having their day in court. We asked Wells Fargo to explain why it believes hundreds of thousands of Americans shouldn’t be allowed to exercise their constitutional right to sue. The bank’s response made little sense (unless you’re a Wells Fargo executive).

Last week, We Do Count, a coalition of consumer advocacy groups, wrote a letter [PDF] to Wells Fargo CEO urging the bank to stop using arbitration agreements to sidestep accountability.

“Consumers have no reason to believe that Wells Fargo is doing anything differently, when the bank still persists in depriving its customers and workers of their basic constitutional rights,” reads the letter, signed by nearly two dozen groups, including the Consumer Federation of California, National Consumer Law Center, and Public Citizen. “A change in culture does not mean doing the right thing only when it does not cost anything. It means doing the right thing, period. How can Wells Fargo claim to be doing the right thing when it continues to force customers it has wronged into giving up their constitutional rights – even in cases where the account in dispute was created through fraud, identity theft, and /or forgery?”

And the advocacy groups are not alone. At least six U.S. Senators have asked Wells to not force these lawsuits into arbitration.

So why does Wells Fargo — which has already admitted that this fraud occurred — insist on keeping these cases out of the court?"

Read more: The Consumerist: "Wells Fargo tries, fails to explain why customers shouldn't be allowed to sue over fake accounts".
 
 
 
 
 
NEWS for immediate release: Monday, February 27, 2017

Contact: Rosemary Shahan, CARS Foundation, 530-759-9440
               Joe Ridout, Consumer Action, 415-777-9648 ext. 705
               Carol McKay, National Consumers League, 412-945-3242, carolm@nclnet.org
 
 
Consumer / Activist Groups and Wells Fargo Victims Target Wells Fargo
over Forced Arbitration,
Release Letter to Wells Fargo CEO Sloan, Calling on Wells Fargo
To Stop Forcing Customers and Workers to Surrender Constitutional Rights
 
       In news events across the nation, in Washington, DC, and at Wells Fargo's headquarters in San Francisco, consumer and activist organizations closed their accounts with Wells Fargo, to protest the bank's refusal to stop imposing a "rip-off clause" forcing its customers and workers to surrender their constitutional rights, to obtain services or employment.

       The organizations also released a letter from a broad-based coalition of groups calling on Wells Fargo's CEO Sloan to cease forcing its customers and workers to submit to forced arbitration. The bank continues to resist calls from pro-consumer leaders such as Senators Sherrod Brown (D-OH), Elizabeth Warren (D-MA), and Representative Maxine Waters (D-CA), and the editors of leading newspapers for the bank to free its customers and employees to pursue cases before a court of law, particularly regarding millions of accounts set up without their permission, through identity theft, forgery, and fraud.

       "After six years of banking with Wells Fargo, we're switching to another bank that respects the the constitutional rights of its customers and workers," said Sally Greenberg, Executive Director of the National Consumers League, based in Washington, DC. The League already established a new account at Bank of Labor, which does not impose forced arbitration, and is closing its account at Wells Fargo, withdrawing its working capital, of approximately $1.8 million.

       The GOP-controlled Congress and the Trump administration are threatening to fire Richard Cordray, the Director of the Consumer Financial Protection Bureau, who has a long record of protecting consumers. Under his leadership, the CFPB has succeeded in forcing banks to refund over $11.8 billion to consumers who were wronged.

       "They want to replace Richard Cordray with someone who will let crooked banks like Wells Fargo get away with charging consumers billions of dollars through engaging in illegal practices. So it's up to each of us to act, to protect ourselves and also send the message we won't tolerate crooked bankers," said Rosemary Shahan, President of the Consumers for Auto Reliability and Safety (CARS) Foundation. The group unveiled a new website, at "We DO Count.org" focusing on the campaign to make the switch from Wells Fargo to more consumer-friendly banks or credit unions.
 
 
 
 
 
       "Wells Fargo opened up a credit card account without my authorization, and it ended up harming my credit and making many purchases, like a car, and even utilities a lot more expensive, for about five years," said Aaron Brodie, who was a freshman college student when Wells Fargo opened a credit card account without his permission, then refused to close it, after he requested that it be closed. He has sued Wells Fargo, and instead of doing what is right, Wells Fargo is seeking to force his case into arbitration.

       "As long as Wells Fargo requires mandatory arbitration, there is nothing to stop Wells Fargo from violating the privacy rights of its customers and engaging in fraud," said Byron Cooper, who closed his accounts with Wells Fargo as soon as he discovered the bank had opened two new accounts and shifted $25,000 from his checking account to his savings account -- all without his authorization, and despite his insistence he did not want the new accounts. The bank also changed his "free" checking account to one that charged $30 per month and required a minimum balance of $25,000 -- also without his permission.

       Joe Ridout, Consumer Services Manager for Consumer Action, personally hand-delivered the letter to the bank's headquarters in San Francisco. Consumer Action also provided tips for consumers about how to find a banking institution or credit union that does not impose forced arbitration on its customers and workers, and also how to make the transition smoothly so that no payments are missed. "We believe many consumers will be pleasantly surprised to discover the higher interest they earn, and the fewer fees and abusive practices they face, once they switch to a more honest financial institution," said Ridout.

       Most credit unions don't require arbitration. In 2015, the Pew Charitable Trust released a report that provides comparisons of banks, including whether they impose forced arbitration. While some of the policies may have changed, that report provides helpful guidance for choosing options that don't impose arbitration.

Links to relevant documents:

Coalition Letter to Wells Fargo CEO Timothy Sloan

"Wells Fargo Victims Deserve Their Day In Court," Sacramento Bee Editorial, December 8, 2016

"Wells Fargo Blocks the Courthouse Door," Des Moines Register Editorial, December 4, 2016

Consumer Action's Tips for Consumers: How to Make the Switch from Wells Fargo

"Checks and Balances" by Pew Charitable Trust, May 2015


###

 
 
 
Letter to Wells Fargo CEO Timothy Sloan, hand-delivered to Wells Fargo Headquarters In San Francisco by Joe Ridout of Consumer Action
on Friday, February 24, 2017:
 
 
 
 
Alliance of Californians for Community Empowerment
Consumer Action
Consumer Federation of California
Consumers for Auto Reliability and Safety (CARS) Foundation
Courage Campaign
ForgoWells
Homeowners Against Deficient Dwellings
Housing and Economic Rights Advocates
Level Playing Field
Make the Road New York
Montana Organizing Project
National Association of Consumer Advocates
National Consumers League
National Consumer Law Center (on behalf of its low-income clients)
Public Citizen
Public Good
Public Justice
Progressive Congress Action Fund
Tennessee Citizen Action
TURN – The Utility Reform Network
Workplace Fairness
 
 
February 24, 2017

Mr. Timothy Sloan, Chief Executive Officer
Wells Fargo
420 Montgomery Street
San Francisco, CA 94104


Dear Mr. Sloan:

       On behalf of the above-listed organizations, we write to request that Wells Fargo immediately cease its use of forced arbitration "ripoff clauses" to deny customers and workers their constitutional right to obtain justice before a court of law.

       After repeatedly engaging in illegal activities involving millions of its customers, the bank has an obvious interest in repairing its damaged reputation. The public would reasonably expect that Wells Fargo would be eager to take the obvious step of allowing its customers to obtain redress for those violations as easily and efficiently as possible. Instead, it appears that the bank remains entrenched in its view that forced arbitration is so important to the bank's operations that even in the midst of scandal it refuses to restore to consumers and employees a basic constitutional right. This reasoning seems to us deeply miscalculated. It disserves your customers, it continues to harm your reputation, and it compels
 
 
 
 
 
us to continue to call on people across this nation who value their constitutional rights to close their accounts with Wells Fargo, and on institutions that respect those rights to divest from the bank.

       The illegal activities in which Wells Fargo has engaged are not limited to the fraud scandal that captured headlines several months ago. Rather, the bank's violations of the law constitute a pattern of disregard for basic consumer protections. Among those activities are the following:
 
  • Creating roughly 2 million bogus accounts through fraud, identity theft, and / or forgery, causing many victims to suffer significant losses and negative financial consequences, sticking them with nearly $2.5 million in fraudulent fees, and often also harming their credit.
     
  • Illegally repossessing at least 413 vehicles from members of the United States Armed Forces and their families, from 2006 through 2015, while those servicemembers were serving on active duty in defense of our nation – without obtaining a court order, in violation of the Servicemembers Civil Relief Act. This practice was particularly reprehensible, because servicemembers often are assigned to duty in war zones where their expertise is invaluable for our national security. Repossessions can result in a loss of security clearances, costing our nation desperately needed services by highly trained military personnel.
     
  • Illegally foreclosing on homes purchased by 239 members of the United States Armed Forces and their families, while those servicemembers were serving on active duty – again without obtaining a court order, in violation of the Servicemembers Civil Relief Act. This practice is also particularly troubling given its negative impact on our national security, particularly when such practices cause a loss not only of homes, but of security clearances and future job prospects. Wells Fargo was compelled by the U.S. Department of Justice to pay over $28.3 million in relief to the servicemembers and their co-borrowers.
     
  • Engaging in unfair and deceptive practices to maximize the penalties and fees paid by customers to Wells Fargo, by manipulating the chronology of when debits and checks were assessed, costing customers in California alone approximately $203 million in excessive penalties and fees. After a judge awarded refunds to victims of the bank's illegal practices, Wells Fargo continued to litigate and tried to force victims' claims into arbitration, taking their case all the way to the United States Supreme Court. The bank delayed justice for Wells Fargo customers for over ten years, until all avenues for litigation ended and their victims finally won, obtaining $203 million in refunds.
     
There is a common thread in these cases, and it is a disregard for customers' rights when there is a potential impact on the bank's bottom line. Consumers have no reason to believe that Wells Fargo is doing anything differently, when the bank still persists in depriving its customers and workers of their basic constitutional rights. A change in culture does not mean doing the right thing only when it does not cost anything. It means doing the right thing, period. How can Wells Fargo claim to be doing the right thing when it continues to force customers it has wronged into giving up their constitutional rights – even in cases where the account in dispute was created through fraud, identity theft, and /or forgery?

       As the Des Moines Register recently editorialized, after you met with the editors:
 
 
 
 
         "When Wells Fargo's news CEO, Timothy Sloan, met with the Des Moines Register's Editorial Board a few weeks ago, he said the bank intends to do everything it can to win back the trust of its customers…

       "Unfortunately, Sloan made clear in his discussion with the Register that one thing the bank won't consider in its efforts to "make it right" is waiving the contractual requirement that forces customers to take any and all grievances to private arbitration rather than to court. In fact, Wells Fargo recently took the formal step of asking a federal court to disallow the claims of dozens of customers who are attempting to have their case heard by a judge in a court of law.

       "The problem is that arbitration denies customers the legal protections normally afforded through court proceedings, such as the right to appeal. And because arbitration hearings and the evidence they produce are not open to the public, arbitration also helps to conceal widespread, corporate-level misconduct from other potential litigants, as well as from other customers and regulators.

       ...if Wells Fargo is sincere about atoning for its actions and doing the right thing for its customers, it will reverse course and voluntarily waive the arbitration requirement, allowing the people who were victimized by its practices to have their complaints heard in open court." 1

       And, as the Sacramento Bee editorialized:

"As if the rip-off of some 2 million customers weren't enough for Wells Fargo & Co., it turns out that the bank is trying to deprive its victims of their days in court….Wells Fargo has been arguing in federal and state courts that the wronged customers should have to argue their cases, not in public, but in private arbitration.

       "It's a cynical ploy, and destructive to the public trust and the legal system. Forced private arbitration...often tilts contractual arrangements in favor of corporate interests and deprives the public of important consumer information and case law.

       "Companies like it because it keeps bad publicity out of the public record, stymies potential class actions and improves the odds of favorable decisions; private paid judges know that companies often give repeat business to arbitrators who give favorable rulings. Consumers are at a disadvantage in what has come to amount to a shadow system of civil justice….

       "In the Wells Fargo case, the push is particularly reprehensible...the bank claims that those [arbitration] waivers apply to the legitimate accounts, and to the fake ones, even though the signatures were forged in many cases. It's a scam on top of a scam..." 2

       We are plainly not alone in our concern about Wells Fargo's continuing practice of forcing its employees and customers to surrender their constitutional rights as a condition of employment or
1 Editorial: "Wells Fargo blocks the courthouse door," Editorial, Des Moines Register, December 4, 2016. Posted at:
http://www.desmoinesregister.com/story/opinion/editorials/2016/12/04/editorial-wells-fargo-blocks-courthousedoor/94811490/

2 Editorial: "Wells Fargo victims deserve day in court," Sacramento Bee, December 9, 2016. Posted at:
http://www.sacbee.com/opinion/editorials/article119768343.html
 
 
 
 
  services. Forced arbitration is not a sign of respect for an employee or customer; it is the opposite. It also allows Wells Fargo to perpetuate a cover-up of its illegal practices.

       As the current Chairman of the United States Senate Judiciary Committee, Senator Charles Grassley (R-Iowa), stated in presenting legislation in Congress to restore protections from forced arbitration for auto dealers, granting them a special exemption from the Federal Arbitration Act:

       "When mandatory binding arbitration is forced upon a party, for example when it is placed in a boiler-plate agreement, it deprives the weaker party the opportunity to elect another forum. As a proponent of arbitration I believe it is critical to ensure that the selection of arbitration is voluntary and fair. The purpose of arbitration is to reduce costly, time-consuming litigation, not to force a party to an adhesion contract to waive access to judicial or administrative forums for the pursuit of rights under State law.

       "This legislation will go a long way toward ensuring that parties will not be forced into binding arbitration and thereby lose important statutory rights. I am confident that given its many advantages arbitration will often be elected. But it is essential for public policy reasons and basic fairness that both parties to this type of contract have the freedom to make their own decisions based on the circumstances of the case." 3

       Clearly the same principles apply to individual consumers and workers, who have vastly unequal bargaining power when entering into contracts with lending institutions as large as Wells Fargo.

       We call on Wells Fargo to do the right thing, and to immediately cease using forced arbitration clauses in its consumer and employment contracts. A number of competing banks and credit unions already have decided to respect their customers and workers, and not to deny them their constitutional rights. Until Wells Fargo ends its practice of depriving its customers and workers of their constitutional rights as a condition of obtaining products, services, or employment, we will continue to call upon all Americans who value those rights to close their accounts with the bank, and all institutions to divest from Wells Fargo.

       In order to reply to this letter, please contact: Rosemary Shahan, President of the Consumers for Auto Reliability and Safety (CARS) Foundation. We look forward to your prompt action to restore precious, fundamental constitutional rights to your customers and employees.

       Sincerely,
 
Alliance of Californians for Community Empowerment
Consumer Action
Consumer Federation of California
Consumers for Auto Reliability and Safety (CARS) Foundation
Courage Campaign
ForgoWells
Homeowners Against Deficient Dwellings
Housing and Economic Rights Advocates
Level Playing Field

3 Statements on Introduced Bills and Joint Resolutions, United States Senate, June 29, 2001. Statement by Senator Grassley of Iowa.
 
 
 
 
 
 
Make the Road New York
Montana Organizing Project
National Association of Consumer Advocates
National Consumers League
National Consumer Law Center (on behalf of its low-income clients)
Public Citizen
Public Good
Public Justice
Progressive Congress Action Fund
Tennessee Citizen Action
TURN – The Utility Reform Network
Workplace Fairness