U.S. lawmaker Warren slams Wells Fargo over arbitration position | Reuters

By Suzanne Barlyn | NEW YORK NEW YORK Massachusetts Democratic Senator Elizabeth Warren on Monday criticized Wells Fargo & Co's (WFC.N) decision to require customers affected by its unauthorised accounts scandal to go through arbitration rather than allowing them to sue.The San Francisco-based bank last week asked a U.S. court to uphold contract clauses that mandate arbitration, something financial firms often use to protect against litigation. Wells Fargo's situation is unusual, though, because it opened accounts without customers' permission, calling into question whether the contracts and their clauses are legitimate.In a Facebook post on Monday, Warren, a frequent critic of the banking industry, said Wells Fargo's promise to treat customers better in light of the scandal is 'meaningless' as long as it is pursuing arbitration.

Reuters November 29, 2016 06:30:06 IST
U.S. lawmaker Warren slams Wells Fargo over arbitration position
| Reuters

US lawmaker Warren slams Wells Fargo over arbitration position
 Reuters

By Suzanne Barlyn
| NEW YORK

NEW YORK Massachusetts Democratic Senator Elizabeth Warren on Monday criticized Wells Fargo & Co's (WFC.N) decision to require customers affected by its unauthorised accounts scandal to go through arbitration rather than allowing them to sue.The San Francisco-based bank last week asked a U.S. court to uphold contract clauses that mandate arbitration, something financial firms often use to protect against litigation. Wells Fargo's situation is unusual, though, because it opened accounts without customers' permission, calling into question whether the contracts and their clauses are legitimate.In a Facebook post on Monday, Warren, a frequent critic of the banking industry, said Wells Fargo's promise to treat customers better in light of the scandal is "meaningless" as long as it is pursuing arbitration.

"After dozens of Wells Fargo customers sued the bank to recover fees they were charged from these fake accounts, Wells Fargo tried to boot the claims from court and into the closed-door, industry-friendly arbitration process," Warren said. "Unfortunately, there's a real chance a court will let Wells Fargo shuffle these claims off to die in arbitration."A Wells Fargo spokesman did not immediately respond to a request for comment.

Last year, The bank successfully argued in another lawsuit that arbitration agreements customers signed when opening legitimate accounts extended to the unauthorised ones.Warren also used her Facebook post to advocate for a rule proposed by the Consumer Financial Protection Bureau that would eliminate mandatory arbitration.

Before being elected to Congress, Warren was a vocal proponent of such an agency being created as part of the 2010 Dodd-Frank financial reform law. Some Republican lawmakers in newly powerful positions following the 2016 elections have pledged to eliminate it. (Reporting by Suzanne Barlyn in New York; Writing by Lauren Tara LaCapra; Editing by Alan Crosby)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

Find latest and upcoming tech gadgets online on Tech2 Gadgets. Get technology news, gadgets reviews & ratings. Popular gadgets including laptop, tablet and mobile specifications, features, prices, comparison.

also read

Joe Biden names John Kerry, one of the key architects of Paris accord, as next US climate envoy
World

Joe Biden names John Kerry, one of the key architects of Paris accord, as next US climate envoy

Kerry's appointment was one of Biden's first steps in making good on campaign pledges to confront climate damage from fossil fuel emissions more broadly and forcefully

Donald Trump Jr tests positive for coronavirus; 42-year-old has no symptoms, says spokesperson
World

Donald Trump Jr tests positive for coronavirus; 42-year-old has no symptoms, says spokesperson

The eldest son of Donald Trump is the latest member of the president's family to become infected with the coronavirus that has killed more than 250,000 Americans