ST. PAUL, Minn. (KMSP) - Minnesota’s attorney general sent a letter to Wells Fargo CEO John Stumpf on Tuesday, demanding the bank drop a pre-dispute arbitration clause that attempts to force victims of the sham account scandal into arbitration.
“Wells Fargo has used the compulsory arbitration clauses in its customer agreements to deprive consumers who had unauthorized accounts opened in their name of their day in court,” Attorney General Lori Swanson said. “This stretches forced arbitration to a preposterous extreme.”
Wells Fargo has admitted to opening more than 2 million accounts under customers’ names without their knowledge. But a clause buried in the fine print of Wells Fargo account documents requires people to waive their right to a jury trial if they have any dispute over their accounts.
“Wells Fargo has aggressively enforced these provisions against customers who alleged that the bank opened unauthorized accounts under their names," the attorney general wrote.
Swanson highlighted two cases in which Wells Fargo used its arbitration clause in an attempt to force arbitration and avoid a jury trial. In one case, the victim had 7 unauthorized accounts opened in his name, sometimes by forging his signature. In the other case, the victim had 4 unauthorized accounts opened in her name, including “two that were opened before she had even consented to having a legitimate account with the bank.”
Stumpf testified before a congressional panel last week and argued that Wells Fargo’s arbitration clause is a "fair" course toward compensating customers. But Swanson says those customers are still owed a day in court.
“I ask Wells Fargo to reconsider its position and allow consumers who were victimized by the creation of unauthorized accounts to have their day in court, rather than claiming that consumers waived their legal rights simply by opening a legitimate account with the bank.”