Column: How Wells Fargo exploited a binding arbitration clause to deflect customers’ fraud allegations

In the category of adding insult to injury — or perhaps piling one injury on top of another — Wells Fargo is an expert. — Utah attorney Steven Christensen, explaining why forced arbitration clauses like Wells Fargo’s are vulnerable When he appeared last week before the Senate Banking Committee last week, Wells Fargo Chief Executive John Stumpf was pressed on whether he would cease enforcing mandatory arbitration for customer accounts that were not authorized. Sen. Elizabeth Warren and five other Senate Democrats followed up with a letter Friday urging Stumpf “to immediately end Wells Fargo’s use of mandatory arbitration clauses in your customer agreements.” He hasn’t responded. As we observed in 2014, when President Obama effectively outlawed them in workplace discrimination or abuse cases brought against federal contractors, “arbitration clauses are buried in the boilerplate you sign when you enroll with a cable company, go to a doctor or hospital, or take a new job.” Typically they favor the bigger party — a Wells Fargo, for example, will be party to perhaps hundreds or thousands of arbitration hearings per year, while the average customer may face one in a lifetime. Wells Fargo demanded in its defense that the case go to arbitration, noting that its arbitration clause was exceedingly broad: Anyone who became a Wells Fargo customer was agreeing to boilerplate in their customer agreements that covered any dispute with the bank whatsoever, including “claims based on broken promises or contracts, torts, or other wrongful actions.” Theoretically speaking, if Wells tried to take your first-born child in settlement of an overdraft, it would be up to an arbitrator to split the baby.