Wednesday, April 12, 2017

Wells Fargo Wins Bank Arbitrations? Maybe not

The LA Times published this article, based on a study that we can't find.

Admittedly I haven't seen the study, and am only commenting on the article. If anyone has a link to the actual study, I would love to review it.

One more caveat - I don't know anything about these Wells Fargo arbitrations, but I do know something about consumer arbitrations - having represented investors and financial firms in well over 600 such arbitrations over the years.

While the article references a 35% "win" rate for customers, it overlooks the fact that 55% of the arbitrations settled - presumably the customer received a settlement that was satisfactory to him or her.

And, since the article says that the customers won in 35% of the other cases, that indicates that customers received awards or settlements in 70% of the cases that were brought.

The fact is that many customers represent themselves because an attorney won't take the case, and some cases are bad cases. Customers don't lose all of their cases because the process is bad, some, like in court, lose because their claims are bad.

And, the fact that Wells Fargo was awarded damages in some of those cases indicates to me at least, that these weren't all customer claims against the bank - some of them had to be the bank collecting money it was owed by customers.

I am not defending Wells Fargo here - what they did is outrageous - but that is not cause for attacking the arbitration process.
Here's why Wells Fargo forces its customers into arbitration: It wins most of the time 

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Mark Astarita is a securities attorney who has represented parties in over 600 securities arbitrations and countless SEC and FINRA proceedings, across the country for 30 years. He is a partner in the law firm of Sallah Astarita & Cox and can be contacted at mja@sallahlaw.com



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