Have you heard of arbitration clauses? If you haven't, then here's what you need to know. These clauses are in consumer contracts in almost every industry, from nursing homes to cable companies to cell phone providers. However, it's the presence of arbitration clauses in banking contracts that's starting a real stir, and it could affect millions of Wells Fargo victims.
Being a bank teller can be pretty tough sometimes. You interact with a lot of people and you're trusted to handle those people's money, but you're also an employee of the bank. Just as in most workplaces, bank tellers are expected to abide by their employer's policies, and that's where the trouble started for Wells Fargo.
They created around 2 million ghost accounts and fraudulent credit card accounts. Many of them claimed they were pressured to do it because of impossible sales goals. Over 5300 of these people were fired for their part in the scandal. However, not all Well Fargo employees were a part of the scandal that shook American banking. As a matter of fact, some employees might have tried to expose it.
Months ago, we learned that Wells Fargo employees had created millions of fraudulent credit card and bank accounts. These employees had buckled under pressure to meet impossible sales goals, and now Wells Fargo is facing fines and lawsuits from its customers, former-employees, and federal regulators. However, the company probably didn't expect to face scrutiny from its business partners as well.
Authorities from the Consumer Financial Protection Bureau (CFPB) have fined Wells Fargo $185 million for opening 2 million banking and credit card accounts without customer permission. This scandal has rocked the financial world and led to 5,300 Wells Fargo employees losing their jobs, but were they really responsible for what happened?
The Supreme Court is reportedly looking into the enforceability of class action waivers-also known as forced arbitration clauses-in employee contracts. These clauses prevent the people from taking their employers to court with a class action lawsuit, but a recent scandal might prove to be the undoing of this legal loophole.