Did you know that in the small print of your agreement with your card company, there is probably a clause that states there is mandatory arbitration required whenever there is a dispute? We have given up our right to sue and to form any type of class action lawsuit.
Some critics say that this is a secretive process that is often stacked in the company’s favor. This is a statement also made about all the medical arbitration clauses we have all signed. I often wonder what would happen in a doctor’s office if I refused to sign the automatic arbitration clause. Probably be asked to leave. I had a long wait the other day, and actually read the entire clause and the other doctor contracts that I have always signed quickly. Scary.
What is the position of the card companies? A VP from the American Bankers Association stated that financial firms by limiting litigation can pay less in legal fees, and can lower costs for all consumers. Also, Nessa Feddis added that arbitration might be less intimidating than going to court for most borrowers, and that credit card companies have a good record of accommodating the concerns of ordinary people (their word, not mine). Hate to admit that I am one of those ordinary people.
The Consumer Financial Protection Bureau appears not to believe them completely. They will soon issue a report on this subject, and this could lead to new rules. Consumer advocates say this clause is one of the leading but most misunderstood ways that companies limit a customer’s rights.
So watch for further developments. You could find your CC agreement and read it, but I warn you that they are long and confusing and pontifical and did I say long. Perhaps, the CFPB, formed under the Dodd-Frank Act might actually protect some of us. Go get them Cordray.