8 ms·

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 firs

by Pyxl101 10y ago

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 is that the customers were bound to this term by opening their original account -- or at least, that's Wells Fargo's argument. The legal debate seems to be about whether the terms of service signed by the customer at that time would prevent them from suing over the additional fraudulent accounts. Basically, whether those terms of service apply to that situation or not.

FullMtlAlcoholc 10y ago
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
- Lazare 10y ago
  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.
  - FullMtlAlcoholc 10y ago
    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-arbitration-clauses https://www.priorilegal.com/blog/the-limits-of-mandatory-arb...
    - Lazare 10y ago
      Your link is broken for me, FYI. In any case: > Judges in California and federal courts have ruled arbitration clauses signed by customers when they opened legitimate accounts prevent them from suing even over allegedly fraudulent accounts created without their knowledge. http://www.latimes.com/business/la-fi-wells-fargo-arbitration-20151205-story.html http://www.latimes.com/business/la-fi-wells-fargo-arbitratio... Laws have been proposed to change this. Of course, given the election results, I highly doubt the bills, or the proposed CFPB rule you mention are going anywhere.
      - FullMtlAlcoholc 10y ago
        Fixed the link above! Can I pester you with one more question? Is there anything in the law about good faith in contracts? Say, I sign a contract with a private school for my son's education. (Note, this is a ridiculous scenario) that includes binding arbitration. If I find that a teacher has been sexually abusing him and the administration tried to cover it up, would I be restricted from a lawsuit and only allowed binding arbitration?
        Lazare 10y ago
        Talk to a lawyer in your local jurisdiction. :) But offhand: > Is there anything in the law about good faith in contracts? Not in the sense you mean, no. Generally speaking, if they sign it in bad faith (that is, with no intent to comply), and they do not comply, that would be fraud (ie, a crime). If they sign it in good faith (that is, with an intent to comply) but later do not comply, that's breach of contract (ie, a tort) but not fraud. In both cases the contract is broken, but only because they broke it. The intent to break it isn't really relevant to that. Generally speaking the solution for your question is "make sure the contract contains a clause that automatically terminate the contract on initiation of a criminal investigation for child abuse by the authorities" if you're worried about that. Edit: It's not directly relevant to your question, but I feel like I should link this article which is hilarious and disturbing, and goes into some details on the fraud/breach of contract distinction. https://www.bloomberg.com/view/articles/2016-05-23/countrywide-mortgage-hustle-turns-out-not-to-be-fraud https://www.bloomberg.com/view/articles/2016-05-23/countrywi...
chris_wot 10y ago
Any terms of service signed for that would prevent a customer from suing over additional fraudulent accounts would be almost certainly unconscionable.

by Pyxl101 10y ago

FullMtlAlcoholc 10y ago

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

Lazare 10y ago
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.
- FullMtlAlcoholc 10y ago
  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-arbitration-clauses https://www.priorilegal.com/blog/the-limits-of-mandatory-arb...
  - Lazare 10y ago
    Your link is broken for me, FYI. In any case: > Judges in California and federal courts have ruled arbitration clauses signed by customers when they opened legitimate accounts prevent them from suing even over allegedly fraudulent accounts created without their knowledge. http://www.latimes.com/business/la-fi-wells-fargo-arbitration-20151205-story.html http://www.latimes.com/business/la-fi-wells-fargo-arbitratio... Laws have been proposed to change this. Of course, given the election results, I highly doubt the bills, or the proposed CFPB rule you mention are going anywhere.
    - FullMtlAlcoholc 10y ago
      Fixed the link above! Can I pester you with one more question? Is there anything in the law about good faith in contracts? Say, I sign a contract with a private school for my son's education. (Note, this is a ridiculous scenario) that includes binding arbitration. If I find that a teacher has been sexually abusing him and the administration tried to cover it up, would I be restricted from a lawsuit and only allowed binding arbitration?
      - Lazare 10y ago
        Talk to a lawyer in your local jurisdiction. :) But offhand: > Is there anything in the law about good faith in contracts? Not in the sense you mean, no. Generally speaking, if they sign it in bad faith (that is, with no intent to comply), and they do not comply, that would be fraud (ie, a crime). If they sign it in good faith (that is, with an intent to comply) but later do not comply, that's breach of contract (ie, a tort) but not fraud. In both cases the contract is broken, but only because they broke it. The intent to break it isn't really relevant to that. Generally speaking the solution for your question is "make sure the contract contains a clause that automatically terminate the contract on initiation of a criminal investigation for child abuse by the authorities" if you're worried about that. Edit: It's not directly relevant to your question, but I feel like I should link this article which is hilarious and disturbing, and goes into some details on the fraud/breach of contract distinction. https://www.bloomberg.com/view/articles/2016-05-23/countrywide-mortgage-hustle-turns-out-not-to-be-fraud https://www.bloomberg.com/view/articles/2016-05-23/countrywi...

chris_wot 10y ago

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