Oregon-based Umpqua Bank joins Wells Fargo, Chase in unfriendly consumer practices.
David Sugerman, consumer advocate and Portland lawyer, advised Oregonians last week on his website, "If you’re an Umpqua Bank customer, you might want to seriously consider moving your funds to a credit union."
The reason has to do with Umpqua Bank's decisions about mandatory arbitration. We've talked about this before on this site: mandatory arbitration is a tactic corporations use to bar customers from filing class action lawsuits. Instead, they require that customers with grievances settle with the company out of court, in arbitration.
Take Action
Are you an Umpqua customer? If so, take a moment to post on Umpqua Bank's Facebook Page and voice your concern about this new, unfriendly step.
Forcing mandatory arbitration has many upsides for the corporation, and none for the consumer; by banning class actions, consumers have no ability to hit corporations hard in their pocketbooks.
Sugerman says,
To put it concretely, if a bank illegally charges five dollars each year to a million customers, it earns $5 million per year in illegal profits. In the past, consumer lawyers have stopped that nickel and diming by pursuing class actions. If a class of a million consumers collects $5 per consumer plus attorney fees and costs, does anyone think the bank will continue the illegal practice?
Further Reading
- Supreme Court deals blow to consumer rights. Oregon Consumer, 05/06/11.
- Umpqua Bank joins Wells Fargo and Chase in requiring consumers to arbitrate disputes, barring class actions. The Oregonian, 01/23/12.
- A modest proposal: Close your Umpqua Bank account. www.DavidSugerman.com, 01/24/12.
Our voices were heard: B of A backing off debit card fees.
We reported in August that Wells Fargo was planning on implementing a monthly fee to Oregon customers using a debit card, and then Bank of America announced that it would be implementing a similar fee nationwide.
Consumer outrage was loud and strong, as customers bailed from Bank of America and other institutions that were planning on fees.
As of this week, all major banks have rescinded their plan and will not be charging the planned-on debit card fees.
This story is proof-positive that consumer voices do matter, and that institutions listen when the collective voices of their customers are loud.
"We have listened to our customers very closely over the last few weeks and recognize their concern with our proposed debit usage fee," said David Darnell, co-chief operating officer. "Our customers' voices are most important to us. As a result, we are not currently charging the fee and will not be moving forward with any additional plans to do so."
Wells Fargo customers in Oregon to see $3 debit card fees soon.
Wells Fargo has announced that it will test a monthly $3 fee for debit cards for customers in Oregon (and four other states) beginning October 14, 2011.
Customers will see the charge on their November statements. There are many exemptions to the new rule (e.g., military, college and teen checking accounts as well as many consumer and business accounts). This rule comes after new federal rules limiting the amount that banks can charge retailers for a debit card "swipe."
Read More:
The Oregonian: Wells Fargo rolls out monthly $3 fee on debit cards in Oregon & Washington
Supreme Court deals blow to consumer rights
The United States Supreme Court last week ruled on a case that will have an effect on consumer rights across the country. In what Deepak Gupta, an attorney for Public Citizen called "a crushing blow," the Supreme Court ruled in a 5-4 decision that companies can ban class action lawsuits in a contract's fine print.
Many of us have received a small check from a class action lawsuit, which is a way that a large group of customers can take action against a company when they have a grievance (for instance unfair fees, discrimination, errors in billing, etc). By presenting themselves as a large group, the lawsuit has a greater impact than if a single individual were suing, and the overall impact on a company is great enough to impact change.
The Supreme Court case was called AT&T v. Concepcion, and involved customers of AT&T who were suing over the cost of sales tax on AT&T wireless phones that had been advertised as free. Justice Scalia wrote the majority opinion, which was also backed by Justices Roberts, Kennedy, Thomas and Alito.
The result of the decision, according to Public Citizen's attorney Deepak Gupta:
"Now, whenever you sign a contract to get a cell phone, open a bank account or take a job, you may be giving up your right to hold companies accountable for fraud, discrimination or other illegal practices. Class actions are an essential tool for justice in our society. Brown v. Board of Education was a class action. The fate of class actions should not be decided through the fine print of take-it-or-leave-it contracts."
The Washington Post reported the decision by saying that "large corporations won a substantial victory", and consumer groups are concerned over the impact. The issue has garnered the attention of a group of legislators, who will be introducing legislation that would restore the right of consumers to seek justice in the courts. Senator Al Franken (MN) is introducing the bill, called the Arbitration Fairness Act, joined by Senator Blumenthal (CT) and Rep. Hank Johnson (GA).
Further Reading
- Supreme Court rules for AT&T in arbitration case. Reuters Canada, 04/27/11.
- In AT&T v. Concepcion, U.S. Supreme Court Deals Crushing Blow to Consumers. Public Citizen, 04/27/11.
- U.S. Supreme Court will decide fate of class-action consumer suits in AT&T v. Concepcion. Public Citizen, 11/09/10.
- Another 5-4 Supreme Court win for corporations- the end of class action lawsuits. Daily Kos, 04/28/11.
- Supreme Court says arbitration agreements can ban class-action efforts. Washington Post, 04/27/11.
- Sens. Franken, Blumenthal, Rep. Hank Johnson Announce Legislation Giving Consumers More Power in the Courts against Corporations. Press release, Senator Franken's office, 04/27/11.
