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.
How Are Consumer Contracts Hurting Wells Fargo Victims?
You see, if a company wrongs consumers, arbitration clauses keep consumers from banding together in class action litigation. Instead these clauses force consumers to face these companies in arbitration—a sort of private court—instead of through the real court system. And since few people actually know much about the arbitration system, they usually don’t bother to pursue the case. This has helped many companies avoid being sued in recent years, but that could be changing.
Wells Fargo has been using the arbitration clause in its Consumer Account Agreements to delay and dismiss class action suits filed by individuals that fell victim to the bank’s fake account scandal. This has kept many people from suing the bank over its fraudulent activity, but at least one case is trying to buck this strategy.
In Utah, a federal court judge is considering an argument against Wells Fargo’s arbitration clause. The plaintiff claims that the forced arbitration clause can’t be used to shield Wells Fargo from liability over fraudulent activities. The case says that if Wells Fargo used the arbitration clause in order to act illegally, then the contract with the bank should be void for numerous reasons. If the bank didn’t intend for the clause to be used to block liability for illegal activity, then the arbitration clause should be waived.
What do you think? Should the victims of the Wells Fargo fake accounts scandal be allowed to band together in a class action lawsuit? Do you think the arbitration clause is a fair way for the bank to protect itself? Keep following our blog for more answers to these questions. You can also see what else our Macon personal injury attorneys have to say by visiting Facebook and Twitter.