Mandatory Arbitration Stacks Deck Against Credit Cardholders, Data Show
Source: Public Citizen

Consumers who seek justice in disputes with their credit card companies shouldn’t expect to find it in binding mandatory arbitration (BMA); in cases decided in California by a major arbitration firm over a four-year period, consumers lost 95 percent of the time, a new Public Citizen report shows.

Further, virtually all were collection cases filed against consumers by credit card companies or firms that buy debts from these companies, indicating that credit card companies are using arbitration as a means to collect debts. The report, “The Arbitration Trap: How Credit Card Companies Ensnare Consumers,” was released at a press conference today with lawmakers who have introduced legislation to protect consumers from arbitration, and a victim of unfair arbitration proceedings.

In the report, Public Citizen pulls back the curtain to reveal the cozy and dangerous relationship between credit card companies and the private arbitration firms that decide their binding mandatory arbitration cases. The result of an eight-month investigation, the report provides, for the first time, a comprehensive analysis of data on nearly 34,000 arbitration cases, and in-depth stories of credit cardholders and their struggles in this nightmarish system.

+ Full Report (PDF; 501 KB)

This entry was posted on Monday, October 1st, 2007 at 11:24 am and is filed under Business and economics, Consumer issues. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.