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

In the Netherlands a bank got destroyed a few years ago by a single person starting a media campaign for a bank-run. This was done in response to "shady practices" on the mortgage side of the bank.

He got people to withdraw over 600 million from DSB Bank in a few days, which caused the bank to run out of liquidity and forced them to freeze accounts. This meant they lost all trust in the market and needed to ask other banks for emergency financing. All other banks declined (with good reasons, a bank falling apart combined with pending legal action on the mortgage side is a very high risk for them to take).

So within three weeks DSB was bankrupt. More here: https://en.wikipedia.org/wiki/DSB_Bank

I can imaging some disgruntled customers going after Wells Fargo in the same way. They have severe legal action pending (which makes them risky for others to save) and have destroyed their image by their reactions to this (which makes it easier to motivate customers to take action). All ingredients that killed DSB are there... The only difference is that DSB was one of the smaller banks and Wells Fargo is huge.

perhaps due to the clickbaity title, it seems people are reading "agree to arbitration" as "agree that Well Fargo's internal decisions are final and waive their right to legal remedy."

let's firstly identify that yes, this is how people in the thread take "agree to arbitration."

Next let me ask: I did a quick Google search,

https://www.google.com/search?q=does+arbitration+always+favo...

expecting to see that, for example, perhaps arbitration always results in the larger player being awarded whatever they say. (Meaning that it is equal to saying "agree that its decisions are final and customers waive all recourse.")

But it seems the link isn't quite conclusive - it seems the results just show that the "Forced arbitration clauses almost always favor the company over the individual" - which is very strong language, but is about "favor" and not outright as categorical.

So I'm curious if people have experience with arbitration -- is it fair to read the arbitration clause as being de facto tantamount to Wells Fargo's decisions being final? (With the arbitration itself being an afterthought, a mere formality.)

Or is it just a bit lopsided, but still not quite as final and definitive as that?

I ask because in theory, in an environment of frivolous lawsuits that can cost companies literally hundreds of thousands or millions of legal fees, it might certainly make sense for arbitration clauses to limit the extent to which they are embroiled in huge lawsuits.

This reason for arbitration would be a bit different from the reason that "it's really just an excuse to say whatever we say is final."

If I were a corporation, I wouldn't think that an arbitration clause is the same as saying "our company's policies are final and we decide what they mean: you waive all right to any recourse".

Is that what other people here think it means?

(Genuine, open question - as you can see I did a Google search more or less with this phrasing.) Curious what you think, or your experiences. Or whether you've used arbitration clauses in the past, either on the corporate side against a frivolous lawsuit, or as a consumer against a large corporation. (I don't expect corporate lawyers from large corporations to read this comment and respond honestly - but small startup CEO's and individuals, sure. Of course, if you're doing evil work for a large corporation as a corporate lawyer enforcing lopsided contracts, I guess you're welcome to come clean under a throwaway...)

If we take as true that our legal system doesn't work and is host to numerous "frivolous lawsuits that can cost companies literally hundreds of thousands or millions of legal fees" then I can understand favoring arbitration as a way to protect companies.

However, I don't think that premise is true. I trust the open, standardized, and (mostly) consistent courts to fairly apply the law. While some lawsuits seem frivolous on the surface, I've consistently found that when I learn the details there is a good reason they proceeded.

> Perhaps the scope of signing away your right to a class action will be better understood.

I don't think there is a lack of understanding, I think (although I have no evidence for this) that MOST consumers, if asked what that clause meant, would say something like "Oh, that's the weasel words that let the company get around legal rules." Which is essentially true.

The problem is lack of power, not lack of understanding. There is no way to avoid these arbitration clauses. The companys' interests are such that they will include them and make no exceptions; consumers cannot even refuse and find a competitor because ALL competitors in the market will insist on it. So long as we offer a "don't have to be subject to the law" clause, everyone will use it.

well take a simple case. divorce proceedings are messy, with this in mind when you met your next great love, suppose that you wanted some kind of simple prenup with them, given that you and they are both great partner and very cooperative. if you did think it a good idea to sign a prenup, you wouldn't both agree to mediation/arbitration below any explicit terms about what you both intended going into it? It seems cheap and a whole lot better than the all or nothing of a full court proceeding being necessary in case of any disagreement - don't you think?

I mean that this is what I understood the purpose of arbitration to be. for both parties to say, "fine, let's go to a neutral third party and we'll agree to whatever they say" versus a full lawsuit.

Within your comment I don't see any positive aspect or defense of arbitration at all -- it seems like for you it is the same as "kangaroo court" and, for example, if you yourself had an arbitration clause in a prenuptual agreement it would be the same as a kangaroo court clause for you?

I guess then that I am not seeing the whole purpose of arbitration anywhere in your comment.