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Sen. Brown Plans Bill to Ban Forced Arbitration in Wells Fargo Sales Scandal
Source: Wall Street Journal
Sen. Brown Plans Bill to Ban Forced Arbitration in Wells Fargo Sales Scandal
On campaign trail, Hillary Clinton steps up attack
on Wells Fargo and arbitration clauses
By YUKA HAYASHI
Oct. 3, 2016 5:17 p.m. ET
WASHINGTON—Sen. Sherrod Brown (D., Ohio) said Monday he plans to introduce a bill to prevent Wells Fargo & Co. from invoking forced arbitration clauses in contracts with customers following the scandal involving unauthorized accounts.
That step would make it easier for customers to sue the bank for any damages they incurred when bank employees opened as many as two million accounts in customers’ names without their consent.
Some lawmakers, including Mr. Brown, have criticized Wells Fargo for using legal agreements buried within contracts. The bank can block customers from filing lawsuits for damages incurred by unauthorized accounts, including negative effects on the customers’ credit scores and borrowing costs.
Such “mandatory arbitration” clauses are controversial but commonly used for financial products and services like bank accounts and credit cards. They are used to force customers into private arbitration when disputes arise, cutting off their ability to file lawsuits that can be certified as class action.
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On campaign trail, Hillary Clinton steps up attack
on Wells Fargo and arbitration clauses
By YUKA HAYASHI
Oct. 3, 2016 5:17 p.m. ET
WASHINGTON—Sen. Sherrod Brown (D., Ohio) said Monday he plans to introduce a bill to prevent Wells Fargo & Co. from invoking forced arbitration clauses in contracts with customers following the scandal involving unauthorized accounts.
That step would make it easier for customers to sue the bank for any damages they incurred when bank employees opened as many as two million accounts in customers’ names without their consent.
Some lawmakers, including Mr. Brown, have criticized Wells Fargo for using legal agreements buried within contracts. The bank can block customers from filing lawsuits for damages incurred by unauthorized accounts, including negative effects on the customers’ credit scores and borrowing costs.
Such “mandatory arbitration” clauses are controversial but commonly used for financial products and services like bank accounts and credit cards. They are used to force customers into private arbitration when disputes arise, cutting off their ability to file lawsuits that can be certified as class action.
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Read more: http://www.wsj.com/articles/sen-brownplans-bill-to-ban-forced-arbitration-in-wells-fargo-sales-scandal-1475529477
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