Why it’s hard to sue credit card companies
If you ask credit card holders what a mandatory arbitration clause is, chances are they have no clue. Yet, almost all of us have signed an agreement with such a self-defeating clause in it.
A mandatory arbitration clause requires that any dispute raised by a customer go through arbitration before a civil lawsuit is filed. In almost all cases, the arbitrators chosen to hear cases are not neutral; they are partial to the interests of the credit card companies. Thus, many consumers unknowingly sign agreements that limit their constitutional right to the courts and forfeit any likelihood of a fair resolution.
However, there are efforts to change the widespread use of such clauses in credit card agreements, employment agreements, franchise agreements, etc. For example, in 2007, the Arbitration Fairness Act (S. 1782, H.R. 3010) was introduced in Congress and called for several new measures, including a consumer’s ability to choose arbitration or the courts. Furthermore, a new movie entitled “Hot Coffee” is increasing the focus on America’s civil justice system. The documentary, which received rave reviews at this year’s Sundance Film Festival, explores the tragic stories of people negatively affected by a civil justice system “under heavy attack”.
In short, when it comes to signing any agreement, especially a credit card agreement, make sure you read the fine print, because that’s probably where you’ll find a mandatory arbitration clause. As I like to say, the big print giveth and the fine print taketh away.