Legislation that would allow victims of Wells Fargo’s practice of opening unauthorized deposit and credit card accounts to seek their day in court, even if they signed contracts that included arbitration for their legitimate accounts in the past, has been introduced in Congress. The Justice for Victims of Fraud Act of 2016 was sponsored by Sen. Sherrod Brown (D-Ohio), Ranking Member of the Senate Banking Committee, and Rep. Brad Sherman (D-Calif), a member of the House Financial Services Committee.
"Forced arbitration is shielding Wells Fargo from being held accountable for tanking customers’ credit scores and charging them fraudulent fines," said Brown. "Wells Fargo’s customers never intended to sign away their right to fight back against fraud and deceit."
CFPB oversight rule. According to Brown and Sherman, their measure will work "hand in hand" with an oversight rule that the Consumer Financial Protection Bureau proposed in May to strengthen protections for consumers. They noted that, while the CFPB proposal would apply only to contracts signed after the rule is final, their bill would allow victims of Wells Fargo’s fraud to seek their day in court even if they signed contracts that included arbitration for their legitimate accounts in the past.
CLR applause. The Center for Responsible Lending applauded the bill’s introduction. "Forced arbitration should not shield Wells Fargo from its deliberate efforts to defraud their customers," said CRL Senior Policy Counsel Melissa Stegman. "Opening fraudulent accounts is not the only abusive tactic Wells Fargo has committed—they are also notorious for manipulating transactions in order to charge excessive overdraft fees to their customers."
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