According to the Consumer Financial Protection Bureau, credit card companies
have taken steps to limit consumer rights in the event of a credit card
dispute. Instead of allowing consumers to proceed with traditional lawsuits,
customers are required to submit claims to an arbitrator. In most cases,
the arbitration process is more favorable to the credit card companies.
It is believed that as many as 80 million credit card customers are covered
by arbitration clauses.
Data from arbitration cases from 2010 to 2012 shows that consumers were
granted in total less than $175,000 in damages and $190,000 in debt forbearance.
However, credit card companies won awards that totaled $2.8 million, mostly
in cases over disputed debt. Another benefit of arbitration to credit
card companies is that it can be used to block class action lawsuits.
Credit card companies say that arbitration is less costly and makes it
easier to resolve disputes. Conversely, the CFPB says that there is no
evidence that it lowers costs to consumers or offers them access to higher
lines of credit. In addition, these clauses are hard for many consumers
to understand. Almost 75 percent of customers surveyed didn't know
if there was an arbitration clause in their contract. Of those who said
they did know, over half were wrong about whether their was in fact a
clause in their credit card agreement.
Consumers who have been the victim of
predatory lenders or are otherwise struggling with creditors may wish to consider bankruptcy.
Bankruptcy may make it easier to have credit card debt discharged or make
it easier to cease contact with creditors. If a bankruptcy petition is
granted, a judge will order an automatic stay of all creditor actions
such as a lawsuit, foreclosure or repossession.
"Consumer Watchdog Says You Should Be Able to Sue Your Credit Card
Company", Bob Sullivan, March 12, 2015