Wells Fargo says customers gave up right to sue by having signatures forged • Hacker News Board

Re: Wells Fargo says customers gave up right to sue by having signatures forged

#11

Post by Lazare » Sat, Nov 26, 2016, 6:01 AM UTC

BEEdwards wrote: post #5

slededit wrote: post #3

Despite the histrionics of this article, its actually an interesting question from a legal perspective. In the case of an account the customer never agreed to open - are they bound by the agreement which opened their primary account, or is there no legal agreement in place? Assuming the original arbitration clause covered the entire business relationship - not just matters specific to the account opened at signing th…

How is it "histrionics"? "are they bound by the agreement which opened their primary account, or is there no legal agreement in place?" How can you be bound by things you never agreed to? "We signed you up for more services, but because you said yes once that means you are always ours."

> How can you be bound by things you never agreed to?

Wells Fargo didn't open accounts for random people; they opened accounts for their customers. Who agreed to resolve future disputes via binding arbitration. And one of those future disputes is over the fake accounts Wells Fargo opened later.

Whatever you think of arbitration agreements, it would make no sense to have one which terminated the moment you have a dispute.

Re: Wells Fargo says customers gave up right to sue by having signatures forged

#12

Post by Lazare » Sat, Nov 26, 2016, 6:05 AM UTC

FullMtlAlcoholc wrote: post #8

Pyxl101 wrote: post #7

Earlier quoted context omitted.

I think the argument (speculating - the article isn't clear on this) is that the customers were bound to that agreement when they legitimately opened their first account. I agree that the article sounds like histrionics because it doesn't explain the situation clearly. The article makes it sound like the customers are being bound somehow based on their forged signatures, which sounds like hogwash to me. My suspicion…

I'm a bit of a numbskull when it comes to legal matters, but wouldn't any previous agreement between the bank and its customer become null and void when the bank willfully and egregiously commits criminal acts by forging signatures and signing them up for services they didn't agree to? For me, this is one of the scariest issues USA faces, a de facto loss to right of trial via binding arbitation

First, no, contracts do not generally become void just because one party committed a crime.

Not that it really matters because, second:

>when the bank willfully and egregiously commits criminal acts

Wells Fargo has not been found guilty of committing criminals acts at all, much less willfully and egregiously. There are some ongoing criminal investigations, and they were hit by some civil penalties. But there have been no criminal convictions.

Re: Wells Fargo says customers gave up right to sue by having signatures forged

#13

Post by FullMtlAlcoholc » Sat, Nov 26, 2016, 6:07 AM UTC

Lazare wrote: post #11

BEEdwards wrote: post #5

Earlier quoted context omitted.

How is it "histrionics"? "are they bound by the agreement which opened their primary account, or is there no legal agreement in place?" How can you be bound by things you never agreed to? "We signed you up for more services, but because you said yes once that means you are always ours."

> How can you be bound by things you never agreed to? Wells Fargo didn't open accounts for random people; they opened accounts for their customers. Who agreed to resolve future disputes via binding arbitration. And one of those future disputes is over the fake accounts Wells Fargo opened later. Whatever you think of arbitration agreements, it would make no sense to have one which terminated the moment you have a disp…

This is more than just a dispute. This is criminal activity and fraud.

Consumer Financial Services Agreements: As of May 5th, the Consumer Financial Protection Bureau has proposed a rule that would prohibit mandatory arbitration clauses in financial services agreements that limit access to class action lawsuits. Once formalized, this rule would apply to all contracts, including those already signed. Although such a rule would not necessarily prohibit mandatory arbitration for single-plaintiff claims, arbitration clauses that do not specifically exclude class action lawsuits from their reach may be invalid regardless.[1]

Consumer Contracts: Although generally upheld, mandatory arbitration clauses in consumer contracts are non-binding when there is evidence of fraud. The Theranos lawsuits have recently brought this reality back to the attention of corporate lawyers. Because Theranos and Walgreens face accusations of widespread fraud, otherwise enforceable arbitration clauses are thrown out, allowing for class-action claims regardless. It’s important to note that these cases demonstrate that the fraud must merely be investigated, not conclusively proven, for the courts to now invalidate arbitration clauses.[1]

I think it's safe to say that fraud in this case has been conclusively proven.

[1]: https://www.priorilegal.com/blog/the-limits-of-mandatory-arb...

Re: Wells Fargo says customers gave up right to sue by having signatures forged

#14

Post by slededit » Sat, Nov 26, 2016, 6:09 AM UTC

FullMtlAlcoholc wrote: post #13

Lazare wrote: post #11

Earlier quoted context omitted.

> How can you be bound by things you never agreed to? Wells Fargo didn't open accounts for random people; they opened accounts for their customers. Who agreed to resolve future disputes via binding arbitration. And one of those future disputes is over the fake accounts Wells Fargo opened later. Whatever you think of arbitration agreements, it would make no sense to have one which terminated the moment you have a disp…

This is more than just a dispute. This is criminal activity and fraud. Consumer Financial Services Agreements: As of May 5th, the Consumer Financial Protection Bureau has proposed a rule that would prohibit mandatory arbitration clauses in financial services agreements that limit access to class action lawsuits. Once formalized, this rule would apply to all contracts, including those already signed. Although such a r…

Criminal charges proceed separately from the civil case which this article is talking about.

Re: Wells Fargo says customers gave up right to sue by having signatures forged

#15

Post by eruditely » Sat, Nov 26, 2016, 6:18 AM UTC

slededit wrote: post #14

FullMtlAlcoholc wrote: post #13

Earlier quoted context omitted.

This is more than just a dispute. This is criminal activity and fraud. Consumer Financial Services Agreements: As of May 5th, the Consumer Financial Protection Bureau has proposed a rule that would prohibit mandatory arbitration clauses in financial services agreements that limit access to class action lawsuits. Once formalized, this rule would apply to all contracts, including those already signed. Although such a r…

Criminal charges proceed separately from the civil case which this article is talking about.

It's not okay to do what they, Wells Fargo, have done(deceive) period.

Full accounting of moral behavior includes an absolute prohibition on selling with an intend to deceive via an asymmetry of information, since risk can be epistemic/subjective related to ignorance of outcomes that the counterparty already knows about, then they sold you a product/service/contract with an intend to offload risk on you, which is strictly immoral period.

Absolute prohibition on parasitism via exchanges made via an asymmetry of information and they cannot prevent restitution because you agreed to not sue for something else.

What a bunch of nonsense.

Re: Wells Fargo says customers gave up right to sue by having signatures forged

#16

Post by FullMtlAlcoholc » Sat, Nov 26, 2016, 6:28 AM UTC

Lazare wrote: post #12

FullMtlAlcoholc wrote: post #8

Earlier quoted context omitted.

I'm a bit of a numbskull when it comes to legal matters, but wouldn't any previous agreement between the bank and its customer become null and void when the bank willfully and egregiously commits criminal acts by forging signatures and signing them up for services they didn't agree to? For me, this is one of the scariest issues USA faces, a de facto loss to right of trial via binding arbitation

First, no, contracts do not generally become void just because one party committed a crime. Not that it really matters because, second: >when the bank willfully and egregiously commits criminal acts Wells Fargo has not been found guilty of committing criminals acts at all, much less willfully and egregiously. There are some ongoing criminal investigations, and they were hit by some civil penalties. But there have bee…

From above:

Consumer Financial Services Agreements: As of May 5th, the Consumer Financial Protection Bureau has proposed a rule that would prohibit mandatory arbitration clauses in financial services agreements that limit access to class action lawsuits. Once formalized, this rule would apply to all contracts, including those already signed. Although such a rule would not necessarily prohibit mandatory arbitration for single-plaintiff claims, arbitration clauses that do not specifically exclude class action lawsuits from their reach may be invalid regardless.[1]

Consumer Contracts: Although generally upheld, mandatory arbitration clauses in consumer contracts are non-binding when there is evidence of fraud. The Theranos lawsuits have recently brought this reality back to the attention of corporate lawyers. Because Theranos and Walgreens face accusations of widespread fraud, otherwise enforceable arbitration clauses are thrown out, allowing for class-action claims regardless. It’s important to note that these cases demonstrate that the fraud must merely be investigated, not conclusively proven, for the courts to now invalidate arbitration clauses.[1]

I think it's safe to say the alleged fraud in this case is under investigation.

Edit: Link fixed!

[1]: https://www.priorilegal.com/blog/the-limits-of-mandatory-arb...

Re: Wells Fargo says customers gave up right to sue by having signatures forged

#17

Post by DannyBee » Sat, Nov 26, 2016, 6:35 AM UTC

Let's take a gander at the federal arbitration act: "A written provision in any maritime transaction or a contract evidencing a transaction involving commerce to settle by arbitration a controversy ... shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract."

Want to guess what grounds exist at law and equity for the revocation of a contract? :)

Note also the now-common practice of requiring individual arbitration is not well-tested in court either. The FAA pretty clearly preempts court class actions when there are mandatory arbitration provisions. However, it is silent, and it's purpose unrelated, to whether that arbitration is individual or class arbitration. It seems likely to me that a state could reasonably say forcing individual arbitration was against their public policy, and not have that pre-empted by the FAA.

Re: Wells Fargo says customers gave up right to sue by having signatures forged

#18

Post by slededit » Sat, Nov 26, 2016, 6:36 AM UTC

eruditely wrote: post #15

slededit wrote: post #14

Earlier quoted context omitted.

Criminal charges proceed separately from the civil case which this article is talking about.

It's not okay to do what they, Wells Fargo, have done(deceive) period. Full accounting of moral behavior includes an absolute prohibition on selling with an intend to deceive via an asymmetry of information, since risk can be epistemic/subjective related to ignorance of outcomes that the counterparty already knows about, then they sold you a product/service/contract with an intend to offload risk on you, which is str…

I am not making a value judgement on what they did - nor am I excusing it.

This is a legal argument about venue - where and how the case should be heard. Getting angry at Well's Fargo might feel good, but in the end its pointless. Understanding the law itself does have practical use going forward. Perhaps the scope of signing away your right to a class action will be better understood.

Re: Wells Fargo says customers gave up right to sue by having signatures forged

#19

Post by eli_gottlieb » Sat, Nov 26, 2016, 7:05 AM UTC

Lazare wrote: post #11

BEEdwards wrote: post #5

Earlier quoted context omitted.

How is it "histrionics"? "are they bound by the agreement which opened their primary account, or is there no legal agreement in place?" How can you be bound by things you never agreed to? "We signed you up for more services, but because you said yes once that means you are always ours."

> How can you be bound by things you never agreed to? Wells Fargo didn't open accounts for random people; they opened accounts for their customers. Who agreed to resolve future disputes via binding arbitration. And one of those future disputes is over the fake accounts Wells Fargo opened later. Whatever you think of arbitration agreements, it would make no sense to have one which terminated the moment you have a disp…

>Whatever you think of arbitration agreements, it would make no sense to have one which terminated the moment you have a dispute.

The very fact that fraudulently "opening" a new account counts as a "dispute" for "arbitration" shows what a load of shit mandatory arbitration agreements are.

Re: Wells Fargo says customers gave up right to sue by having signatures forged

#20

Post by chris_wot » Sat, Nov 26, 2016, 7:12 AM UTC

Pyxl101 wrote: post #7

BEEdwards wrote: post #5

Earlier quoted context omitted.

How is it "histrionics"? "are they bound by the agreement which opened their primary account, or is there no legal agreement in place?" How can you be bound by things you never agreed to? "We signed you up for more services, but because you said yes once that means you are always ours."

I think the argument (speculating - the article isn't clear on this) is that the customers were bound to that agreement when they legitimately opened their first account. I agree that the article sounds like histrionics because it doesn't explain the situation clearly. The article makes it sound like the customers are being bound somehow based on their forged signatures, which sounds like hogwash to me. My suspicion…

Any terms of service signed for that would prevent a customer from suing over additional fraudulent accounts would be almost certainly unconscionable.