A class-action lawsuit filed against Wells Fargo last week might be hamstrung at the starting line, legal experts say.
Customers who had bank or credit card accounts opened in their name without their knowledge face an uphill battle even getting a court to hear their case because of mandatory arbitration contract clauses that protect banks from class-action suits, consumer advocates say.
"It's going to be a serious obstacle," said David Seligman, an attorney and contributor to the National Consumer Law Center. "These clauses are hidden in boilerplate contracts," he said. "They often require you to bring disputes in to private arbitration, and almost always force you to bring them individually."
The Consumer Financial Protection Bureau, which spearheaded the regulatory action against the banking giant, has proposed rolling back the broad latitude that banks have granted themselves to settle disputes outside the legal system this way.
But that won't help these Wells Fargo customers.