What's the deal?
Elizabeth Warren at Credit Slips says,
"The credit card companies keep track of how arbitrators rule, and they can strike those they don't like. Customers don't have a big information base about how the arbitrators ruled in the past, and they end up with whatever arbitrator the companies pick. It is just one more way the deck is stacked against ordinary consumers.
Consider the story of Harvard Law Professor Betsy Bartholet. In her first few cases, she ruled for the credit card companies, and she was asked to do more arbitrations. But once she ruled for a customer, her career as an arbitrator was over. As the CSM reports, sometimes the credit card company didn't even bother to strike her--they just reported that she had a scheduling conflict. As a result, someone who might have listened to a customer's story was always unavailable. Guess who was left to decide the disputes?"
Why does this affect you? Because if you have a credit card you've most likely entered into a mandatory arbitration agreementâmeaning that if the credit card company @%$#@$ you, you'll need to use an arbitrator instead of going to court.
Sen. Russ Feingold (D) of Wisconsin and Rep. Hank Johnson (D) of Georgia have proposed legislation that would prohibit mandatory arbitration clauses in consumer agreements. The legislation would not prohibit arbitration, but it would give consumers a choice.
S. 1782 (PDF) [via Credit Slips]
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