Legislation introduced to address Wells Fargo scandal
The bill was introduced in response to the recent Wells Fargo scandal where millions of accounts were fraudulently opened without consent, using consumer’s personal information from existing accounts.
The legislation, introduced by Bill Dodd, D-Napa, is co-sponsored by California State Treasurer John Chiang, would give victims their day in court by preventing financial institutions from using forced arbitration clauses in cases where they perpetrated fraud.
“The idea that consumers can be blocked from our public courts when their bank commits fraud and identity theft against them is un-American,” said Dodd. “Allowing victims their day in court helps them recover and can prevent more victims by putting an end to illegal business practices. If SB 33 was already law, Wells Fargo would have been publicly held to account years ago, and the fraud could have been prevented from spreading.”
“Wells Fargo’s customers were ripped off twice,” said Richard Holober, Executive Director of Consumer Federation of California. “First, the bank created two million fraudulent accounts. Then when consumers tried to sue, the bank forced them into company-dominated arbitration hearings. SB 33 will guarantee that the victims of a bank’s identity theft will get their day in court.”