Merkley Joins Senators in Introducing Bill to Give Wells Fargo Victims Their Day in Court

WASHINGTON, D.C. — Today, Oregon’s Senator Jeff Merkley announced that he has joined 14 of his colleagues to introduce legislation, the Justice for Victims of Fraud Act of 2016, to give Wells Fargo customers who were victims of a fraudulent account scheme their day in court. Wells Fargo is using the forced arbitration clauses it tucked away in the fine print of contracts customers signed when they opened legitimate accounts to prevent the Wells Fargo customers with fraudulently-opened accounts who were harmed from joining together and taking Wells Fargo to court.

“What Wells Fargo did was outrageous,” said Merkley. “Opening millions of fraudulent accounts was a jaw-dropping betrayal of their customers’ trust, and one that had a real cost for many consumers. Whether it’s fraudulent fees or a falsely-damaged credit score, consumers should have every recourse when it comes to these violations—especially since customers never actually agreed to these contracts for accounts that were created without their knowledge. Wells Fargo should not be able to hide behind fine print and technicalities to escape their day in court.”

Forced arbitration clauses can prevent everyday consumers from taking companies to court for legal relief, and instead put victims of wrongdoing at a disadvantage by forcing their claims to go through an arbitration process. This arbitration process is often stacked against them, since the arbitration is typically provided by private firms who are paid by the companies accused of wrongdoing.

The Justice for Victims of Fraud Act of 2016 would work hand-in-hand with a new oversight rule that the Consumer Financial Protection Bureau (CFPB) put out in May to strengthen protections for consumers. Whereas the CFPB proposal would apply to new contracts going forward, this bill would allow victims of Wells Fargo’s fraud to seek their day in court even if they signed contracts that included arbitration for their legitimate accounts in the past.

The bill is sponsored by U.S. Sen. Sherrod Brown (D-OH) and cosponsored by U.S. Sens. Patrick Leahy (D-VT), Patty Murray (D-WA), Richard Durbin (D-IL), Jack Reed (D-RI), Robert Menendez (D-NJ), Robert Casey (D-PA), Jon Tester (D-MT), Mark Warner (D-VA), Al Franken (D-MN), Richard Blumenthal (CT), Mazie Hirono (D-HI), Elizabeth Warren (D-MA), and Heidi Heitkamp (D-ND), in addition to Merkley.

The bill has been endorsed by The American Association for Justice, Consumers Union, the National Association of Consumer Advocates, the National Consumer Law Center (on behalf of its low income clients), Americans for Financial Reform, the Center for Responsible Lending, the National Association for the Advancement of Colored People (NAACP), Media Voices for Children, Allied Progress, the Woodstock Institute, the Franciscan Action Network, the Economic Policy Institute Center, California Reinvestment Coalition, Consumers for Auto Reliability and Safety, National Consumers League, and Public Justice.