an equal and opposite reaction
Case Details for "Bank of America"
Bank of America settles class action lawsuit relating to arbitration clauses in its card member agreements
The lawsuit accused Bank of America and other credit card companies of unlawfully colluding to require cardholders to arbitrate disputes, including debt collections. The settlement is subject to court approval.
Under the tentative settlement, Bank of America will drop the arbitration clause and class action ban from its consumer and small business credit card agreements for at least 3-1/2 years beginning in 2010. Bank of America will also immediately stop enforcing the existing arbitration clauses against cardholders. Bank of America further agrees not to "contract, combine or conspire" with any other credit card company concerning arbitration.
The lawsuit had accused Bank of America, Capital One, Chase, Citibank, Discover, HSBC and others of having secretly met or consulted some 30 times for the purpose of requiring cardholders to arbitrate all disputes with credit card companies in violation of the antitrust laws. Arbitration is an out-of-court dispute procedure where cases are heard, often in secret, by private arbitrators. Consumer advocates criticize credit card arbitration as biased and lacking many safeguards found in court proceedings that protect consumers from over-reaching by businesses. One purpose of the conspiracy, according to the lawsuit, was to prevent class actions from being brought against these card issuing banks.
Posted on:2009-12-15
Company: Bank of America
Class: BOA Credit Card Customers
Scope: Nationwide
Type of Case: Consumer
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