As Fontana debt settlement attorneys, we were pleased by recent news that one of the nation's largest banks will drop its mandatory binding arbitration requirement for customers with credit card, bank accounts and certain types of loans. According to the Associated Press, Bank of America dropped its binding arbitration clause from contracts with customers. The move most likely means that the bank will face more lawsuits, because the binding arbitration requirement meant their right to sue was waived. Under it, all disputes had to be heard by arbitrators, who are a bit like private-sector judges.
A Bank of America spokeswoman said the bank made the change after hearing from customers. However, the Associated Press said, the move came after two major groups of arbitrators stopped hearing consumer credit disputes. One of those groups, the National Arbitration Forum, did so after being sued by Minnesota Attorney General Lori Swanson for its ties to credit card companies and collection agencies, which Swanson said was unfair and deceptive to consumers. Congress is also considering banning mandatory binding arbitration clauses in credit card contracts. One expert interviewed in the article said Bank of America's decision was likely caused by these developments.
Mandatory binding arbitration has long been criticized by consumer advocates as unfair and anti-consumer. Arbitrators are supposed to be neutral, but because they often have professional ties to clients, are paid by the large companies involved in their cases, or both, consumer advocates say the deck is typically stacked against consumers. Furthermore, consumers must typically agree to arbitration and sign away their right to sue in the courts as a condition of signing up for a product or service. Some courts have declared this practice "unconscionable" and invalidated the agreements. Nonetheless, Bank of America's decision is good news for consumers. As Ventura debt settlement lawyers, we strongly prefer that credit card companies have access to the courts from the beginning, rather than having to fight an expensive legal battle just for a chance at suing in a fair and open court.
At Howard Law LLP, we confront arbitration issues and other issues of credit card customers' rights as part of our debt settlement practice. In this practice, we help clients who are in debt over their heads negotiate with creditors for a solution that allows them to pay off the debt and end the harassment for good without going into bankruptcy or ruining their credit. In many cases, credit card companies and other creditors are willing to take less than the full amount of the debt in exchange for one lump-sum payment, because they know they may get even less money if they force victims into bankruptcy. Our Dana Point debt settlement attorneys also guide clients about the likely results of settling with creditors for their next tax bill and their credit reports.
If you're struggling with debt you don't think you can ever pay off and you're ready to find a new solution, Howard Law can help. We offer free, confidential consultations to all potential clients. To set one up, please contact us online or call toll-free at 1-800-872-5925.