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?

Opening the August credit card statement is going to send the blood pressure of some Chase customers skyward.  For the second time this year the bank has changed up the rules for how it calculates the minimum payment due for certain customers, increasing the rate from  2% of the outstanding balance to 5%.  If you’re carrying a $5,000 balance that means your required minimum payment went from $100 in July to $250 this month.

That move, in turn, has raised some serious hackles. Over at about.com the call to action is to file a complaint with the Federal Trade Commission over this “unfair practice.”

Hmmm. Unfair? I’m not so sure. Unfriendly, absolutely. There is no question that tightening the payment screws at a time when unemployment is at a 25-year high and furloughs are the hot new employment trend isn’t exactly consumer-friendly. Yet there is indeed a residual benefit for cardholders. Increasing the minimum payment rate by 150%  means Chase customers will pay off their debt a whole lot faster. That’s a boon for their personal balance sheet as well as saving a bundle in interest costs. While I don’t believe for one second that Chase’s motivation is to help its customers — this is all about Chase reducing its risk — I think Curtis Arnold over at CardRatings.com got it right by tagging the change a case of “tough love.” What's your take? The poll is open.

So is Craigslist a handy free alternative to newspaper classifieds — a sort of virtual flea market and community bulletin board — or is it a haven for criminals and creeps looking to rip you off or worse?

What's gotten me thinking about this perennial question is a lurid and depressing expose of the Craigslist criminal underworld in, of all places, Maxim magazine, generally more known for its exposes of the scantily clad bodies of Hollywood hotties.

The story, by Frank Owen, delves into some of the more notorious crimes associated with Craigslist, spending the most time on the case of accused "Craigslist killer" Philip Markoff, who allegedly targeted victims for robbery in the site's "Erotic Services" section. But Owen also delves into the less sensationalistic scams that proliferate on the site, interviewing one scammer who says he collected thousands of dollars from an ingenious bed-and-breakfast bait-and-switch:

[The scammer] wrote a carefully worded posting [advertising] an "amazing bed and breakfast in the heart of Paris.” The address he gave was a nondescript apartment building where he’d once stayed. Then he downloaded a picture of a cozy-looking interior from a magazine, clicked on a button, and, presto ….

Immediately Church was inundated with queries. People wanting to book a room were instructed to send a 50-Euro nonrefundable deposit to Church’s PayPal account. On receipt of the money, Church e-mailed a fake invoice. More than 300 people fell for the scam.

And that's just the tip of the iceberg. Owen describes all sorts of other scams, and a quick Google search will bring up countless others; this site keeps an ongoing tally.

Of course, as fans of Craigslist point out, the vast overwhelming majority of Craigslist posts don't lead to fraud or murder; they lead to the same sort of person-to-person bartering or buying that newspaper classifieds lead to. As Owen himself acknowledges, "Craigslist is an indispensable resource for tens of millions of people worldwide: With 40 million posts a month and sites in 570 cities and 50 countries, it is one of the icons of Web 2.0, as recognizable a brand as Facebook or Google."

So the answer to the question I started out with is, then, both: Craigslist is floor wax and a dessert topping — a handy free alternative to newspaper classifieds and a haven for crooks and creeps.

For some, who have a basic trust in human nature, buying and selling stuff on Craigslist makes perfect sense, especially with the economy in its current parlous state. It's an easy way to pick up new (well, new-to-you) stuff on the cheap or to make a little extra money unloading stuff you no longer need or want.

But I'm not buying it. Literally: I've never bought or sold anything on Craigslist, nor do I plan to anytime soon (and yes that includes "Erotic Services"). It's not that I'm scared to buy from strangers online; I do that all the time, through eBay and Half.com and Amazon Marketplace. The difference is that, on these sites, I'm dealing with sellers who are accountable for their actions; they have reputations (and feedback scores) to protect. That doesn't guarantee they'll behave honestly or in a businesslike manner — I've dealt with a couple of bozos — but it vastly improves the odds.

Do you have enough faith in human nature to use Craigslist, or do its unsavory aspects keep you away?

When the Obama administration proposed a new government agency solely devoted to protecting consumers who buy financial products, government officials knew they’d be facing opposition from Wall Street, banks and the financial services industry. But who knew that some of their most vocal opponents would come from the government itself?

That opposition became crystal clear when Federal Reserve Chairman Ben Bernanke, Federal Deposit Insurance Corporation Chief Sheila Bair and several other regulators showed up on Capitol Hill last Friday. Testifying before the House Financial Services Committee, they seemed more interested in protecting the powers of their own agencies than in making changes to the financial system.

First up at Friday's hearings, Treasury Secretary Tim Geithner reiterated the need for a Consumer Financial Protection Agency, saying the economic crisis shows that the current financial system “failed in its most basic responsibility” to supply credit and protect consumers. "I think it's very hard to look at that system and say that it did anything close to an adequate job of what it was designed to do," Geithner told the committee. Hard to disagree with that assessment, considering the record number of home foreclosures, bad mortgage loans and rising credit card defaults in the past year.

The proposed CFPA would take over consumer protection powers currently spread throughout several government agencies, including the Fed, the FDIC, the Office of Thrift Supervision and the Office of the Comptroller of the Currency. That doesn't sit too well with the chiefs in charge of those organizations. Following Geithner’s testimony, Bernanke said consumer protection responsibilities should stay with the central bank, arguing that the Fed’s bank supervisory powers go hand in hand with consumer protection. John Bowman, acting director of the OTS, and John Dugan, head of the OCC, both said enforcement of consumer protection should remain within their agencies. While FDIC chair Sheila Bair endorsed the creation of the CFPA and said that the CFPA should be able to write new enforcement rules, Bair said that federal banking regulators such as the FDIC should retain authority to supervise insured institutions.

Geithner's response: "With great respect to the Chairman and other supervisors who are reluctant to do this, they are doing what they should, which is defend the traditional prerogatives of their agencies. I think frankly all arguments should be viewed through that prism."

It’s been a tough going for the CFPA this summer. House Financial Services Committee Chairman Barney Frank (D-Mass.) delayed plans to mark up the bill  to create the new agency until after Congress returns from its summer recess in September. Frank said he believes the CFPA bill has enough support to win approval but agreed to slow down to give the opposition a chance to weigh in. Meanwhile, Republicans have proposed an alternative that would strip the Fed of its regulatory role and abolish the OCC and the OTS. In their place would be a single regulator for depository institutions, which would include an office focused on consumer protections. Unlike the administration's plan, the GOP-envisioned regulator would have no authority over nonbank institutions, such as mortgage brokers.

All this has moved the CFPA off the fast-track that Barney Frank talked about just a few weeks ago and gives industry lobbyists more time to work on defeating the proposal for a consumer financial watchdog.

Nobody likes telemarketers. Heck, most telemarketers probably don't even like themselves. But no matter how much they annoy you, it's probably not a good idea to threaten to burn down their offices and kill them.

One Ohio man was arrested and charged with making a "terrorist threat" for apparently doing just that.

The story is a little complicated, but what evidently happened was this: The man, Charles Papenfus, got an allegedly deceptive notice "warning" him his car's factory warranty was about to expire. Angry about the notice — the Papenfus family says they've never had a warranty on that particular car — Papenfus, it appears, called up the company (a hawker of "extended warranties" that had settled a lawsuit over using similar tactics in the past) to voice his outrage. At some point in this phone call (or in a subsequent one initiated by the company), Papenfus allegedly made the threats that got him jailed.

After spending several weeks in jail, Papenfus is out on bond now, but still faces charges that could send him to prison for up to four years.

Whether you think he actually is a terrorist, or some kind of folk hero, he's gotten himself into some serious trouble.

Fortunately, there are many ways you can fight back against telemarketers and sleazy marketers in general without putting yourself in legal jeopardy. The best way, of course, is to put yourself on the National Do Not Call Registry.

But if you find yourself still getting calls, try these tactics, which are guaranteed to annoy the callers at least as much at they annoy you:

1) Tell them you've got the Glengarry leads, and they can't have them.

2) Simply repeat back everything they say, in a high squeaky voice, the way you did when you were a six-year-old trying to annoy your older brother.

3) Talk in a ridiculous fake accent.

4) Don't say anything; just make fart sounds into the phone.

5) Take a tip from Jerry Seinfeld, and ask them for their home phone number so you can call them back later.

Hey, if you're going to engage in non-violent resistance, you might as well have a little fun, too.

This is a critical time for the Obama Administration’s proposed Consumer Financial Protection Agency, a centerpiece of its financial market reforms.

The CFPA, officially proposed in June, is under fierce attack by the financial services industry, the U.S. Chamber of Commerce and a growing number of business groups. Those forces scored a few points Tuesday when House Financial Services Committee chairman Barney Frank announced that his committee is delaying consideration of the CFPA until September. Frank originally aimed to have the committee approve the legislation by early August.

Though some lobbyists proclaim to be backing the administration’s plans for financial reform, they’re adamantly against an agency that will have consumer financial interests as its sole focus. Steve Bartlett, head of the Financial Services Roundtable, told The New York Times that his group has a dual goal: to support comprehensive reform and to kill the CFPA.

The need for the CFPA also took a hit from Federal Reserve chief Ben Bernanke, who weighed in testifying before the Senate Banking Committee Wednesday, arguing that the Fed should keep its consumer protection powers instead of transferring them to the CFPA. Bernanke also suggested that Congress beef up the Fed's consumer protection role.

Consumer groups are fighting back and recruiting their own allies from the financial services world to support the CFPA. On Wednesday, Rep. Frank joined Americans for Financial Reform for a press conference on Capitol Hill to make the economic case for the new agency. Bennett Freeman, an executive at Calvert Investments, and Tim Duncan, founder of Story Street Wealth Management, were on hand to support the call for the CFPA.

Meanwhile, Elizabeth Warren, who originated the idea for a consumer financial product safety commission two years ago and is expected to become its chief — if and when the agency is created — posted a YouTube video Monday to bring her case for the CFPA directly to the public. She also testified before Congress on the need for the agency earlier this month. And on Monday, Warren published an article in Baseline Scenario debunking three myths about the proposed agency.

Where do you stand on the need for a consumer financial watchdog? Do you think the Obama administration is doing enough to make sure its proposed CFPA becomes a reality? Or is it a misguided effort?

Ever since President Barack Obama proposed his wide-ranging financial reforms last month,  investors have been wondering how hard he will push for his plans. So far the White House has kept up the pressure, but opposition is mounting. And it's far from clear that Obama is prepared to fight what increasingly looks to be a two-front battle.

First, the progress update. On July 10 the Treasury Department sent legislation to Congress that would turn Obama's investor protection proposals into law. Here are the key changes the White House is seeking:

• Give the SEC power to regulate broker compensation. Right now, brokers are overseen by FINRA, a self-regulatory agency funded by the brokerage industry. This reform would ban brokers from selling high-commission products that make money for the brokerage firm, but not for customers.
• Require brokers to adopt the same fiduciary standards as investment advisers. That means brokers would have to act in the best interests of their clients. Currently brokers are only required to make recommendations that are "suitable" for their customers, even if there are less costly options available. By contrast, investment advisers, who are regulated by the SEC or the states, follow fiduciary standards.
• Restrict or limit mandatory arbitration. Brokerage customers typically must waive their right to sue in the event of a dispute. Instead, any conflicts must be resolved through arbitration — a process that investor advocates say is biased in favor of brokerage firms.
• Improve fee disclosure. Brokers would be required to provide more information about fees before selling a product. Right now most disclosures are not given to investors until after the sale is completed.

One early victory sign: a leading industry group, the Securities Industry and Financial Markets Association has announced it will support a fiduciary standard for brokers.

The White House is also putting its weight behind a new Consumer Financial Protection Agency, which would regulate mortgages, credit cards and other loan products. On  Tuesday assistant Treasury Secretary Michael Barr testified before the Senate Banking Committee in support of the agency. "There are too many agencies with consumer protection responsibilities, their authorities are too divided, and their primary missions are too distant from consumer protection," Barr said. "There is only one solution to these deep structural flaws: one regulator with one market with one mission — to protect consumers."

Other financial services industry lobbyists seeking to defend the status quo, as well as conservatives who oppose more government regulation, are pushing back hard. Edward Yingling, head of the American Bankers Association, testified before the Senate Banking Committee that  a consumer protection agency "will chill efforts to innovate and respond to consumer demand." And Peter Wallison of the American Enterprise Institute argued that the agency  "reflects a paternalistic desire on the part of elites to control and limit others’ choices while leaving themselves unaffected."  

On the other side of the philosophical divide, some critics say that the White House isn't working hard enough to overcome opposition resistance to a new consumer protection agency, while investor advocates are calling for even stronger fiduciary protection.  

And on Wednesday, an investor coalition that includes two former SEC chairmen, former chair of the Commodity Futures Trading Commission Brooksley Born, and money managers Bill Miller and Jeremy Grantham, issued a report that attacked Obama's plan to reorganize federal agencies on several counts, including awarding risk oversight to the Federal Reserve. As the report put it, the Fed's credibility has been "tarnished" by its "easy credit policies" and "lax regulatory oversight." Instead, the group recommends establishing a  Systematic Risk Oversight Regulator, which would have a staff appointed by the president and confirmed by the Senate.

It looks to be a long, hot summer in Washington.

What do you think of Obama's financial reform proposals — will they make life better for consumers and investors?

Exactly what will Obama’s financial-industry consumer guardian police? The answer became clearer last week when the administration sent Congress a proposed law detailing its vision for the Consumer Financial Protection Agency.

Obama's plan for establishing the CFPA contains a few surprises regarding its authority. While the Securities and Exchange Commission will continue regulating investment products, the administration says the CFPA will oversee “financial products and services." That’s a pretty broad term, and when the agency proposal was first unveiled in mid-June, most observers took that to mean mortgages and credit cards, the two financial products that have caused the most trouble for consumers and the banking system in the past few years.

But the new 152-page blueprint lays out exactly what the Treasury considers a financial product or service, and it goes well beyond home loans and credit cards.  According to the proposal, the CFPA will oversee any financial activity that comes in connection with extending credit or servicing loans, which includes everything from overdraft protection on bank deposit accounts to stored-value cards.

But most noteworthy, say consumer advocates, is the inclusion of some notoriously overpriced insurance products associated with loans: credit insurance, mortgage payment insurance and title insurance. (Property and casualty insurance are explicitly excluded from the CFPA’s jurisdiction). “There are some serious signs of abuse in the sale of these insurance products, which have low loss ratios, high profit margins and big markups,” says Travis Plunkett, legislative director for the Consumer Federation of America, who testified before the House Financial Services Committee two weeks ago and urged Congress to include loan insurance products under the CFPA.

Credit insurance is sold with a variety of loan products, promising to cover your loan payments if you get laid off or become disabled. Similarly, mortgage payment insurance is designed to cover your home loan payments if you become disabled or die. But premiums for these products are expensive, and you’re typically already covered if you’ve got life or disability insurance.

Unlike credit or mortgage payment insurance, title insurance isn’t optional, and it protects the lender (not you) from any losses associated with ownership issues connected to title on your property. (Note that mortgage payment insurance isn't the same thing as private mortgage insurance, which lenders typically require when a down payment is less than 20%, and which protects lenders in the event of a mortgage default.) Title insurance prices vary widely, and while consumers are free to shop around, most rely on recommendations from real estate agents and lawyers, whose firms frequently get a cut of the premiums. Read this piece from my colleague Stephen Gandel about overpriced title insurance.

The bottom line: Insurance is complicated, and while there are many good reasons to buy insurance — for your health, your life, if you’ve got dependents, or your car — the addition of these insurance products to the CFPA will make it easier to determine which policies you can live without.

The new credit card reform law is full of good consumer protections, but here's one you might not know about: It's going to require companies like FreeCreditReport.com (owned by credit bureau Experian) to clearly state that their services aren't actually free.

Who doesn't love those FreeCreditReport.com commercials? You know, the ones featuring the lovable 20-something singing about his credit troubles in a variety of musical genres? In the first, he's dressed in pirate gear and crooning about how he has to work in a seafood restaurant because his identity was stolen (it works best if you don't think too hard about it). My favorite jingle is the one that has him singing about how he married his dream girl, only to find out that her credit was bad, too. You can see all the commercials here:

The only  problem, of course, is that FreeCreditReport.com is not really free. In order to get your report through the site, you must sign up for a trial membership in the site's "Triple Advantage Credit Monitoring" program. If you don't cancel your membership within a 7-day trial period, you're billed $14.95 a month. And plenty of people have fallen for the site's promise without realizing they were going to be billed. The Better Business Bureau has received 9,865 complaints about the site in the last 36 months, with some complainants saying that they kept being billed even after canceling membership.

But now, thanks to the Credit Card Accountability, Responsibility and Disclosure Act, companies touting free credit report services must disclose in their ads that consumers are entitled by law to receive a free credit report from each of the three credit bureaus, and that the official web site to obtain them is AnnualCreditReport.com. And radio and TV ads must clearly state, in both the audio and the video, "This is not the free credit report provided for by federal law."

That's good news, since the web-only public service commercials the Federal Trade Commission created in response to FreeCreditReport.com's ads need all the help they can get:

Even as President Barack Obama unveils his financial regulatory reform proposals, critics are hammering the weaknesses in his plan—everything from continued reliance on ineffective federal agencies to setting up a dubious council of regulators to the  too-big-to-fail bank problem.

Still, there is some praise for one of Obama's proposed reforms — the creation of a consumer financial product safety commission that would monitor the marketing of mortgages, credit cards and other loan products. The agency would take power away from bank regulators, who have proven to be more focused on keeping banks running than protecting consumers. The notion of a financial product safety commission was first proposed by Elizabeth Warren, a former Harvard law professor and now chair of the TARP Congressional Oversight Panel.

Sounds good. But there's a crucial element missing: some form of protection for small investors, not just borrowers. After all, the victims of the financial meltdown included millions of middle-class Americans who were trying to save for retirement and the children's college educations. Many were poorly informed about the risks in their investments by their brokers, insurance agents and fund companies.

As first conceived, the financial products safety commission would have played an investor protection role by regulating a wide range of financial products, including mutual funds and possibly annuities. Along the way, however, the idea of giving the new agency authority over investments was scrapped. Pressure from financial services lobbyists was clearly one reason. But mostly, the Obama administration has kept its focus on the causes of the market meltdown, which include too much consumer borrowing.

That leaves the chief responsibility for investor protection with the Securities and Exchange Commission, which has famously been asleep at the switch. Just ask anyone who invested with Bernie Madoff.

Still, buried deep in the 89-page White House proposals are several intriguing investor protection reforms. The most important: requiring financial advisers and brokers to follow the same strict  "fiduciary" standards.

To understand why this notion is so revolutionary, you have to realize that brokers and financial advisers don't follow the same rules right now. Financial advisers are regulated by the SEC, as well as as the states. And they must meet tough fiduciary standards, which require them to put the client's interest first. Brokers are regulated by FINRA, a self-regulatory agency funded by brokerages, which only requires them to offer products that are "suitable" for the clients, without mentioning conflicts of interest. Most investors don't know the difference.

Question is, will the SEC really follow through on the White House reforms? Since becoming SEC chair earlier this year, Mary Schapiro has promised that the agency will take a more active role in watching out for investors. But the record is mixed. On Thursday June 18, for example, the SEC will hold joint hearings with the Labor Department on problems with target-date retirement funds, many of which shocked investors with their losses in the meltdown. Schapiro has said she favors improved disclosure of target fund risks.

But the SEC shelved reforms of mutual fund 12(b)-1 fees, which were designed to pay for marketing for small funds but have become de facto sales loads. And efforts to ensure brokers and financial advisers follow the same standards have been bogged down for years, with many brokers lobbying to remain under the FINRA.

Still, Barbara Roper, a longtime investor advocate with the Consumer Federation of America, is hopeful. "For decades it's gotten worse and worse for investor protection." she says. "This is the first time I've seen signs that it may move in the other direction."

What do you think Obama should do to help protect investors?