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Banks, like Wells Fargo, use forced arbitration clauses in their contracts, forcing customers to sign away their right to go to court when opening a checking or savings account or getting a debit card or credit card. This means that any disputes between customers and banks over account fees, identity theft, or other charges will be decided by an arbitrator that the bank helps choose, rather than an impartial judge. In 2016, Pew Charitable Trusts studied the account disclosures of 44 of the country’s largest banks and found that 70% included a mandatory arbitration clause.


Aaron Brodie, Texas

Aaron Brodie, a 911 dispatcher in Texas, had an unauthorized credit card account opened for him by a former Wells Fargo employee that led him into debt and harmed his credit score, resulting in years of higher interest rates and other costs.

He has since tried to join in a class-action suit against the bank, but Wells Fargo is trying to push him and other plaintiffs into arbitration.

Brodie believes the only way he’ll be able to achieve justice is through the courts, but the Wells Fargo argues that the forced arbitration clauses found in his legitimate account carry over to the fake account. A clause buried in a contract he never signed for a product he never consented to now stands in the way of his accessing his day in court.

Tracy Kilgore, New Mexico

In July 2011, Tracy Kilgore went to a local Wells Fargo branch to change a signature card on behalf of the Daughters of the American Revolution, where she volunteered as Treasurer. Tracy did not personally bank with Wells Fargo or have any accounts with them. The bank teller asked her for her name and ID and began typing away her computer, and she promptly left once the change was processed.

Two weeks later, Tracy received a letter from Wells Fargo saying her credit card application had been rejected, though she never applied for one. When she saw the application was filed the day after she had visited the Wells Fargo branch, it became clear the bank tried to open a fraudulent credit card in her name. After Tracy found the rejected application was listed on her credit report, she called and wrote to Wells Fargo for months asking them to remove it. The bank kept saying it would take another 7-10 days, then another 2-3 weeks, to no avail. In the end, she never even got an apology.

Now, Tracy has joined with other defrauded customers in a class action lawsuit against the bank, but Wells Fargo is trying to force each consumer to fight them one-by-one in a biased and secretive arbitration system. Even though Tracy has never banked with Wells Fargo, their lawyers are trying to block her from suing them in court by pointing to an arbitration clause she never signed.

Press Clips

American Banker: Why CFPB’s arbitration rule is essential (two words: Wells Fargo)

The Consumer Financial Protection Bureau’s long-awaited financial arbitration rule is being opposed by banking lobbyists, and a resolution has already been filed in Congress to block it. This would be a grave mistake.

Vice: Wells Fargo Is Trying to Bury Another Massive Scandal

It turns out Wells Fargo has a long history of using arbitration to evade legal scrutiny. In fact, for the past six years, Wells has tried to use arbitration to block a class-action suit that every other major bank in America long ago settled. This has not only delayed restitution for regular customers, but revealed exactly why Elizabeth Warren’s brainchild Consumer Financial Protection Bureau (CFPB) moved to eliminate class-action bans through arbitration clauses earlier this month: It hands big banks a license to steal with impunity.

The Hill: Consumer bureau moves to prevent the next Wells Fargo-style scandal

Big banks and payday lenders bury “ripoff clauses” in the fine print of take-it-or-leave-it contracts to block class-action lawsuits and push all disputes into biased and secret proceedings rigged in favor of companies. Since few consumers can afford to fight small-dollar disputes by themselves, banks can trick and trap customers with illegal charges and then pocket billions in stolen money.

National Law Review: Wells Fargo Sham Accounts Cost Bank another $142 Million

The Wells Fargo sham accounts scandal just cost the bank another $142 million after a San Francisco judge ruled a proposed class action settlement is “fair, reasonable and adequate.” “The settlement requires Wells Fargo to repay the fees charged to class members by Wells Fargo for unauthorized accounts, and provide millions of dollars of additional monetary relief to the class,” said Derek Loeser, a partner at the law firm. “We believe this is an outstanding result obtained for the benefit of a proposed nationwide class, notwithstanding Wells Fargo’s effort to block the class action with an arbitration clause.

Mat-Su Frontiersman (Alaska): LTE: Wells Fargo Took Us for a Ride

For more than a decade, Wells Fargo was opening fake accounts across Alaska, racking up 5,970 victims of their fraudulent business practices. To date, the bank has avoided accountability for its wrongdoing by invoking fine-print forced arbitration clauses. No one signed the arbitration agreement on these fake accounts but, incredibly, Wells Fargo argues the signatures on customers’ legitimate accounts carry over to the fake ones. By doing so, they are denying Alaskans their day in court. I can only hope Wells Fargo is forced to abandon this practice after the Consumer Financial Protection Bureau releases its rule to limit the use of forced arbitration in financial contracts this summer, and that our representatives support the rule on our behalf. But the damage here is already done.

Morning Consult: OPINION: Courts, Regulators Must Stop Wells Fargo’s Rigged Arbitration System

The country’s largest banks, such as JPMorgan Chase and Bank of America, eventually made amends and settled with their customers; all told, the total settlements were more than $600 million on just the largest banks alone. Wells Fargo, on the other hand, refuses to reimburse its customers. Instead, the bank has spent years trying to force its customers into a complicated arbitration process, which would in reality provide little chance of recovering the money that was stolen through these overdraft fees. According to a study from the Consumer Financial Protection Bureau, most customers simply give up when forced to arbitrate, especially for small-dollar claims, considering the time and expense. In the handful of arbitration claims filed in 2010 and 2011, only 9 percent of consumers with affirmative claims obtained relief, recovering only 12 cents of every dollar claimed. In contrast, 93 percent of companies won their claims in arbitration, recovering an average of 98 cents on the dollar.

Deseret News (Utah): OPINION: Wells Fargo case shows how fine print can erode freedom

A Utah judge will decide whether more than 50 consumers defrauded by banking giant Wells Fargo in its fake account scandal will be forced to pursue claims one by one in a secret arbitration system. Even as the bank’s PR machine loudly trumpets a focus on restoring consumer trust, Wells Fargo is insisting once again that defrauded customers should be barred from having their day in court.

Des Moines Register: Editorial: Who will hold Wells Fargo accountable? 

No doubt some at Wells Fargo feel the bank has been punished enough. But has anyone — aside from the hundreds of fired, low-level employees who appear to have been doing their bosses’ bidding — really been held accountable for one of the biggest banking scandals of modern times?