Subscribe to this BlogGood news for credit card users
Finally, some happy news for credit card holders. Late last week, Bank of America announced it will no longer require customers who sign up for their credit cards, bank accounts and certain loans to give away their right to sue in a dispute.
Bank of America’s decision is the biggest yet in a growing movement away from mandatory arbitration clauses, which force consumers who have a problem with a service provider into private arbitration forums to settle disputes. These forced arbitration clauses have become ubiquitous in consumer contracts, from cell phones and credit cards to nursing home agreements and employment contracts. Consumers have a lousy track record of winning in these private arbitration forums.
BofA’s change follows news in July that the National Arbitration Forum is halting hearing mandatory consumer arbitration cases (thanks to a lawsuit it settled with the Minnesota Attorney General that the NAF hid its ties to the debt-collection industry). The American Arbitration Association also announced it will halt debt collection arbitration cases until it overhauls its guidelines. In July, JP Morgan Chase also said it would no longer submit consumer disputes regarding credit cards to arbitration. According to USA Today, other credit card issuers, including American Express, are weighing similar moves.
While consumer advocates say the changes are a victory for credit card users, it doesn’t help customers of thousands of other banks, cell phone companies, and other service providers who are still forcing people into private arbitration to settle disputes. Still, the moves should give a boost to a bill pending in Congress called the Fairness Arbitration Act, which would eliminate mandatory arbitration clauses in most consumer contracts. This is an issue on the president's radar screen, too: In June, Obama called for an end to forced consumer arbitration as part of his financial market reforms.
Tell us: Have you ever had a dispute with a service provider that went to arbitration? How did you fare?
Yes I had a dispute that went to arbitration with NAF. Not with a bank or credit company, but a consumer complaint against a large multinational corporation where they owed me money for services not rendered. It was a total nightmare fighting both the corporation AND the Forum who worked together hand in glove. We stalemated in Arbitration after great expense, both parties agreed to abandon it (their case was that bad, and it was too expensive for me to continue) and we settled out of court for the entire amount.
Arbitration with that outfit was a total waste of time and money, WORSE than the courts for requiring legal expertise. "The Forum" as they style themselves was blatantly, overtly acting as the corporation's agent. Arbitration is a fraud foisted on the American public, most unknowing that they have waived their rights to anything even resembling civil justice.
Thier is people that have thier bills paid by electronic banking and the date is allways the same with the banking but thesae credit card outfits will change due dates and as far as i care it is just to make people late on thier bill. they need to make these outfits make a due date the same day all the time, except like in feb. where it is a short month.
i want to sue b of a. i never signed anything, they said my account, due to my good record, was getting free, overbalance protection. Well now, years later they have it as a credit card on my credit and are charging me 25.99% interest!
Jack Kellen
Sanders Douglas Associates International
Tucson, Arizona
Poor track record in arbitration? Come on, it makes no difference where the dispute ends up. The DEBTORS owe the money and should lose in any forum! It is laughable to hear people on the subject thinking that courts are better. When you lose in arbitration, you can vacate the award or leave it and it does not affect your credit as if you lose in court. The creditor has to spend more time and money to confirm the award in court (yes I said Court) thereby giving you more chances to defend yourself. This country is getting more ignorant every day. Makes life as a lawyer very fun!
Is there any legal action being considered against Bank of America, Citibank and or any other institution who also used AAA knowing they were a bribed judge and jury? Thats all consumers get, oh, okay we were caught red handed cheating millions of consumers out of hundreds of millions of dollars for the past decade. We'll change our contracts now. No harm no foul? I'm glad there has been a spotlight on credit card abuse and some reform, but are we really changing anything?
This sounds like great news at first. When you examine it however, not so much. They still prohibit customers from banning together for class action lawsuits. So that means you would have to individually take them to court, for what amounts to really not much money in most cases. Its just not economically feasible.
What customers are left with is just settling the dispute with Bank of America directly. So instead of having a supposedly unbiased, haha, arbitrator between you and them. Now you have shrugged off that mask of being unbiased.
This is really not going to benefit consumers at all. If you do have a dispute with them, all I can say is good luck with that. Your going to need it.
Check out my blog about Bank of America's lifting of mandatory arbitration at….. http://www.thedebtgazette.com/2009/08/bank-of-america-disputes/