When they open an account at
But what consumers couldn't have anticipated is that Wells Fargo would use this agreement to insulate itself against class-action lawsuits when the bank fraudulently created entirely new accounts in their name without their knowledge or consent. That's what the company has been doing since its employees created more than 2 million such accounts, then paid the fees generated by the new accounts by surreptitiously dipping into the customers' legitimate accounts. And astoundingly, the courts have sided with the bank, ruling that even the question of whether a dispute must be arbitrated had to be resolved by an arbitrator.
Wells Fargo, which has refunded the fees generated by the fraudulent accounts, argues that it is committed to resolving customers' complaints without going to arbitration. The bank also notes that those consumers remain free to go to small claims court (where the maximum award in California is $10,000).
But Wells Fargo shouldn't even have the ability to invoke arbitration — a process that has been notoriously skewed in favor of the businesses that demand it — over accounts the bank created behind its customers' backs.
Lawmakers should bar banks from requiring arbitration over disputes related to accounts customers didn’t seek to create, as Sen.