Arbitration & Mediation

More on Credit Cards and the Trend of Disappearing Arbitration Clauses

By Christopher B. Hopkins, Esq.

We've covered prior stories about major credit card companies/banks dropping arbitration clauses from their customer agreements (see our post last month re: JP Morgan and Bank of America).

A website, Legal X, recently ran a story suggesting that the banks' voluntary decisions may actually be due to "pressure of a pending class action lawsuit filed by Philadelphia-based Berger & Montague." Apparently the allegation in that case was that lenders were colluding on arbitration terms and that there were still several defendants in that case including The National Arbitration Forum, Discover Financial Services, Citibank, and HSBC.

In a related news story, it was reported that "[u]nder the tentative settlement, Bank of America will drop the arbitration clause and class action ban from its consumer and small business credit card agreements for at least 3-1/2 years beginning in 2010. Bank of America will also immediately stop enforcing the existing arbitration clauses against cardholders."

The AP ran a similar story regarding Capitol One's actions, although that DC-area based lender denied that their actions were related to the lawsuit.

Full post as published by Florida Arbitration Law on January 12, 2010 (boomark / email).