TNCA Joins Groups Calling on Wells Fargo to End “Rip-Off Clause”
Tennessee Citizen Action joined consumer groups from across the country today in calling on Wells Fargo to end the practice of forced arbitration — known as the “rip-off clause” that prevents consumers from using every legal avenue to recover damages.
From a press release on the issue:
The organizations also released a letter from a broad-based coalition of groups calling on Wells Fargo’s CEO Sloan to cease forcing its customers and workers to submit to forced arbitration. The bank continues to resist calls from pro-consumer leaders such as Senators Sherrod Brown (D-OH), Elizabeth Warren (D-MA), and Representative Maxine Waters (D-CA), and the editors of leading newspapers for the bank to free its customers and employees to pursue cases before a court of law, particularly regarding millions of accounts set up without their permission, through identity theft, forgery, and fraud.
“After six years of banking with Wells Fargo, we’re switching to another bank that respects the the constitutional rights of its customers and workers,” said Sally Greenberg, Executive Director of the National Consumers League, based in Washington, DC. The League already established a new account at Bank of Labor, which does not impose forced arbitration, and is closing its account at Wells Fargo, withdrawing its working capital, of approximately $1.8 million.
Congress and the Trump administration are threatening to fire Richard Cordray, the Director of the Consumer Financial Protection Bureau, who has a long record of protecting consumers. Under his leadership, the CFPB has succeeded in forcing banks to refund over $11.8 billion to consumers who were wronged.
“They want to replace Richard Cordray with someone who will let crooked banks like Wells Fargo get away with charging consumers billions of dollars through engaging in illegal practices. So it’s up to each of us to act, to protect ourselves and also send the message we won’t tolerate crooked bankers,” said Rosemary Shahan, President of the Consumers for Auto Reliability and Safety (CARS) Foundation. The group unveiled a new website, at “We DO Count.org” focusing on the campaign to make the switch from Wells Fargo to more consumer-friendly banks or credit unions.
“As long as Wells Fargo requires mandatory arbitration, there is nothing to stop Wells Fargo from violating the privacy rights of its customers and engaging in fraud,” said Byron Cooper, who closed his accounts with Wells Fargo as soon as he discovered the bank had opened two new accounts and shifted $25,000 from his checking account to his savings account — all without his authorization, and despite his insistence he did not want the new accounts. The bank also changed his “free” checking account to one that charged $30 per month and required a minimum balance of $25,000 — also without his permission.
Joe Ridout, Consumer Services Manager for Consumer Action, personally hand-delivered the letter to the bank’s headquarters in San Francisco. Consumer Action also provided tips for consumers about how to find a banking institution or credit union that does not impose forced arbitration on its customers and workers, and also how to make the transition smoothly so that no payments are missed. “We believe many consumers will be pleasantly surprised to discover the higher interest they earn, and the fewer fees and abusive practices they face, once they switch to a more honest financial institution,” said Ridout.
Most credit unions don’t require arbitration. In 2015, the Pew Charitable Trust released a report that provides comparisons of banks, including whether they impose forced arbitration. While some of the policies may have changed, that report provides helpful guidance for choosing options that don’t impose arbitration.