December 25, 2009

• Arbitration becoming a thing of the past, Pt.4
    The decision to back off under heat.

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  So while a few of the largest credit card companies and two of the most prominent arbitration firms were participants in extensive deceit and abused the trust of consumers, proponents of arbitration say it is unfair to penalize all firms; especially those that have been fair in working with credit card customers. They advocate that lawmakers have a review system to assure a fair and transparent arbitration process while handing out stiff penalties to any credit card company or arbitration firm that might participate in dual roles or violate rules.

  Despite pleading by arbitration advocates, it would appear those credit card companies and arbitration firms that have halted arbitration processes, have only done so under pressure from lawmakers and several states' attorneys. Furthermore, of the three major lenders who recently backed off arbitration, only one has actually removed it from credit card contracts; Bank of America. JPMorgan & Chase and Capital One have only temporarily ceased mandating arbitration as the means of settling credit disputes. The action also appears to have been motivated by the nation's three largest card companies in settling out of court in the class action lawsuit. In an attempt to squash this rumor, a Capital One representative said the lawsuit did not influence the company's decision to eliminate the agreement from the card's contact but rather realized that most of the cases were already being handled through alternative methods.

  Furthermore, those credit card companies that did settle in the class action suit maintain that the only motivation to do so was to save the costs of continued legal proceedings. Additionally, they have not admitted to any wrong doing and say they have “fully complied with all laws.” That remains to be seen, however, it does hand over a victory to consumer advocates who expect all lenders will soon be forced to stop the unfair practice of hiring arbitration firms to settle consumer debt disputes. It is expected that several other large card companies who have yet to settle in the suit will soon be following the lead of the three giants
  
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