After paying out $185 million in penalties for perpetrating a massive fraud on millions of customers, Wells Fargo executives sat in front of Senate hearings blaming all kinds of people below the pay grade of executive. Meanwhile, Wells Fargo workers began coming out of the woodwork to remind the federal government to look into how many complaints had been lodged against Wells Fargo internally—surrounding the very fraudulent practices and environment that they were now claiming ignorance of. Wells Fargo tried everything they could to see if CEO John Stumpf would be able to hold his job, but once executive after executive were given chances to resign with huge packages, it finally came to a head with Stumpf stepping down as the CEO. Throughout those hearings Wells Fargo beat the drum that they would make things right with the customers for whom scam accounts had been opened.
The bank has sought to kill lawsuits that its customers have filed over the creation of as many as two million sham accounts by moving the cases into private arbitration — a secretive legal process that often favors corporations.
Wells Fargo is pushing for arbitrations because it separates consumers, making class actions impossible. It also allows Wells Fargo to keep the dirty laundry details of their fraud private and not available to public scrutiny. Considering that Wells Fargo was complicit in millions of cases of identity theft, it's very frustrating for many customers to see them weaseling about.
"Wells Fargo's customers never intended to sign away their right to fight back against fraud and deceit," said Senator Sherrod Brown, an Ohio Democrat, who introduced a bill last week that would prevent Wells from forcing arbitration in the sham account cases.
Yet even as the bank reels in the court of public opinion, Wells Fargo has been winning its legal battles to kill off lawsuits. Judges have ruled that Wells Fargo customers must go to arbitration over the fraudulent accounts.
One of the problems with arbitration cases is that they make arbitrators money, and that money comes from the corporations that bring these arbitrators cases and therefore, a steady flow of contracted jobs. You also have to remember that Wells Fargo opened over two million fraudulent accounts. Many of those legal claims from customers amount to $100 or less. Getting an individual lawyer to help you in an arbitration case for less than $100 is near impossible. Multiply that by thousands of class-action plaintiffs and Wells Fargo might be paying out lots of their ill-gotten money. Going to arbitration has worked before for Wells Fargo. After trying to litigate class-action lawsuits against them back in 2009 for their excessive overdraft predatory behaviors, Wells Fargo continued to try to fight to move the cases into arbitration. This was a decision in 2012, after years of Wells Fargo attempting to pretend they hadn't agreed to litigation.