Chase Bank Is Quietly Adding a Forced Arbitration Clause To Some Credit Cards (fastcompany.com) 130
An anonymous reader quotes a report from Fast Company: JPMorgan Chase is quietly re-introducing a heavy-handed legal maneuver. Today, its Slate credit card customers received an email that the bank was updating its account terms. In the message was a lot of legalese about certain tweaks, and it included one big addition: forced arbitration. According to Chase, the new agreement includes a new section entitled "Binding Arbitration." The section goes as follows: "This arbitration agreement provides that all disputes between you and Chase must be resolved by BINDING ARBITRATION whenever you or we choose to submit or refer a dispute to arbitration. By accepting this arbitration agreement you GIVE UP YOUR RIGHT TO GO TO COURT (except for matters that may be taken to a small claims court). Arbitration will proceed on an INDIVIDUAL BASIS, so class actions and similar proceedings will NOT be available to you."
Chase adds that people can opt out of this clause, but they must do so by August 7, 2019, by mailing the bank a letter via snail mail. This is a reversal for the financial establishment. In 2009, Chase dropped a binding arbitration agreement from its credit card terms of service. This was in direct response to a class action lawsuit levied against Chase, Capital One, Bank of America, Citigroup, Discover, and HSBC, which accused them of illegally conspiring to force cardholders to go to arbitration for disputes instead of the courts. Some 10 years later, Chase now wants to employ the sneaky tactic once again. This agreement means that its Slate cardholders are unable to go to court against the bank, except for small claims. Most importantly, it means that cardholders cannot come together and levy a class action suit against the bank.
Chase adds that people can opt out of this clause, but they must do so by August 7, 2019, by mailing the bank a letter via snail mail. This is a reversal for the financial establishment. In 2009, Chase dropped a binding arbitration agreement from its credit card terms of service. This was in direct response to a class action lawsuit levied against Chase, Capital One, Bank of America, Citigroup, Discover, and HSBC, which accused them of illegally conspiring to force cardholders to go to arbitration for disputes instead of the courts. Some 10 years later, Chase now wants to employ the sneaky tactic once again. This agreement means that its Slate cardholders are unable to go to court against the bank, except for small claims. Most importantly, it means that cardholders cannot come together and levy a class action suit against the bank.
Re: News for Credit Card holders (Score:2)
They can still go to court and file class action suits. Just because you're forced to agree to it doesn't mean it will hold up in court.
Re: News for Credit Card holders (Score:2)
The key part is "forced". It's very dubious that a company can simply announce the agreement has changed and now a court can't review that change. That said it's unclear what the opt-out part means legally.
Forced arbitration doesn't prevent you suing if the company is acting unlawfully either. Companies can't make laws
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Indeed companies can't make laws, but large companies can afford to lobby and effectively buy them.
Finance will kill capitalism. It's only a matter of time.
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"Funny" how they can simply send you a pop-up and it's legally binding in their minds but you have to snail-mail them (which they will inevitably lose the few that people actually send) to do the same.
It's ridiculously abusive and one-sided. Forced binding-arb needs to go back to the supreme court and be overturned. Same for the prohibition of class-action. Mind you, class action rarely benefits the victims but at least the company gets dinged while the lawyers get rich.
Re: News for Credit Card holders (Score:1)
First we need to have a Supreme Court again.
Oh damn (Score:4, Insightful)
Must vote with feet yet again.
Re: Oh damn (Score:1)
Y'know, if half the people had balls you'd have a class action made out of millions of people. Forced arbitration only works because it's a divide and conquer approach.
Make a class action out of 3/4 of the American population and then take THAT to the Supreme Court.
Oh...that's right. If we do that then the government shuts down WhatsApp.
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Y'know, if half the people had balls you'd have a class action made out of millions of people. Forced arbitration only works because it's a divide and conquer approach.
Make a class action out of 3/4 of the American population and then take THAT to the Supreme Court.
If, and that's an if, they lost the banks will simply give each participant $5, not change their practices and then add a new charge with a misdirecting name like "Legal protection enhancement charge" for $5 a month.
Class actions don't work at changing behaviour as they can be written off as the cost of doing business (and passed on to the customer). The only way to prevent things like this is to regulate the banks with penalties that hurt for non compliance... Like we do out here in the ROTW, we limit h
Republicans (Score:1)
They hate marijuana.
Re: (Score:2, Funny)
You're too young to remember, but in the 1930's, there was a huge problem with negros smoking reefer in jazz clubs and raping white women. Something had to be done.
Re: Republicans (Score:2)
Marijuana was not outlawed in 70s lol. It's been illegal since the 1930s
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Actually that was limited to your mom.
eBay (Score:4, Insightful)
Re: eBay (Score:1)
JPMC tends not to send tricky updates constantly but yes in this case you must opt out explicitly. Until you opt out you are under binding arbitration. Any attempt to sidestep BA will result in your account being permanently closed. At least that's how I read it. It goes both ways, of course, in the unlikely event you want to sue a huge bank over a several hundred dollar credit limit.
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The problem is that often this is followed by other companies. It would take a lot of effort to free my finances from Chase - and then where? Wells Fargo - known for illegally screwing their customers? Its like trying to avoid tracking from apps and devices - there really are not practical alternatives.
This needs to be fixed with laws.
Re: eBay (Score:2)
Plenty of banks (Score:3)
t would take a lot of effort to free my finances from Chase - and then where? Wells Fargo - known for illegally screwing their customers?
You are aware that there are more than two banks out there right? Switching banks isn't that hard unless you have a very unusual financial situation. I used to bank with Chase until about 2-3 years ago and switched away to another bank because of some of their policies my wife and I weren't pleased with. Wasn't very hard at all. There are LOTS of banks out there that would be happy to have your business. Not to mention credit unions which can be a really good option too. Not all of them are douche bag
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Last time I canceled a credit card it took tons of time because I missed one auto-bill to a phone company. Ended up with the humans agreeing that the amount had been paid, but the phone company billing system continuing to charge my canceled credit card, and sending it to collection. Probably 20 hours of my time to sort it out.
Not relevant (Score:1)
Last time I canceled a credit card it took tons of time because I missed one auto-bill to a phone company.
So you cancelled a credit card and couldn't be bothered to keep track of what you auto-bill to it and thus everything is too difficult to bother changing banks. That about sum up your argument? Sounds like a you problem. Maybe combined with a shitty phone company billing system. Has nothing to do with the difficulty or lack thereof of changing banks.
Ended up with the humans agreeing that the amount had been paid, but the phone company billing system continuing to charge my canceled credit card, and sending it to collection. Probably 20 hours of my time to sort it out.
Let's stipulate that is all true and really happened. What does that prove? It proves you were dealing with a bad phone company at most. It has nothing w
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The problem is that often this is followed by other companies. It would take a lot of effort to free my finances from Chase - and then where? Wells Fargo - known for illegally screwing their customers? Its like trying to avoid tracking from apps and devices - there really are not practical alternatives.
This needs to be fixed with laws.
A credit union?
"Forced Arbitration" is fraud. (Score:5, Informative)
Professional arbitrators KNOW they will be working with the bank over and over again. That's their income source. They automatically have a bias in favor of the people they will work with again and again, and no real incentives to find for people they will likely see only once.
It's a game and the dice are loaded in Guess Who's favor.
Nope, it's a law (Score:2)
Vote. And for God's sake show up to your primary. It doesn't do any good if we're choosing between say, Donald Trump [time.com] & Joe Biden [youtube.com], both with a long history of selling us out.
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Not Just Slate (Score:5, Informative)
It's not just the Slate card. I got the notice for the Amazon card. I'm not going to bother with sending the damned letter to opt out (and they require you to provide your full account number in that letter). I'm just going to continue to almost never use that Amazon card.
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I got this for my Freedom card too (which I only ever use for what's in the 5% category so screw them)
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just sue them again in a class action suit duh. should be easy enough...
It's really time... (Score:1)
to tell all these corporations to go fuck themselves and their binding arbitration.
I have Constitutional Rights just like they do so what gives them the right to strip me of my rights?
Fuck off...
Re: It's really time... (Score:2)
The Constitution was repealed in 2001.
In Soviet America workers have no rights.
Is this even legal? (Score:4, Insightful)
I mean it seems like taking someone to court should very much already be a constitutional right or something.
Re:Is this even legal? (Score:4, Informative)
It's totally legal, provided both parties agree to it. They are extremely common, and a legitimate way to handle disputes. Courts actually prefer that contract disputes go to arbitration rather than go through the legal process.
It's true that arbitration favors the corporations, which is one reason they like it so much, but it's not a completely one sided thing. The primary benefit is that lawyers are not required to get a fair hearing (there isn't actually much for lawyers to do in arbitration), or at least a "fair enough" hearing for the courts to accept it, so the costs are orders of magnitude less than taking the dispute to court. That's the real reason corporations love it.
If arbitration cannot resolve the dispute, you can still go to court over it. The only real hurdle there is that the court must agree that arbitration couldn't solve the dispute, which is going to take more than just you not liking the result of arbitration. It's a big hurdle, but not an insurmountable hurdle. A court can also overturn any arbitration clause if they feel it isn't reasonable. They are well established, however, and lawyers know how to write them so that a court will accept them.
The gist of it is, read your agreements, and don't sign something you're not comfortable with. You're allowed to negotiate contracts, and in fact contracts where you can't reasonably negotiate the terms (e.g. a EULA) are looked at more dubiously than more traditional contracts. If you've got a paper contract that you're signing, feel free to modify it and return it. Don't just accept what has been written as inevitable.
It didn't used to be legal (Score:5, Informative)
Congress passed a law making arbitration binding and the Supreme Court upheld it. That changed everything. Just like when they changed bankruptcy law so that you couldn't discharge debt under $100,000.
Credit Card debt is now secured against all future earnings you might have. You can basically enter into contracts that make you a slave since binding arbitration removes all legal protections. Even though if you're signing yourself into slavery you're clearly not in a position to be agreeing to anything.
I said this elsewhere on the thread but for God's sake vote, vote in your primary and make your friends and family do the same. Corrupt politicians like Joe Biden [youtube.com] are only vulnerable in primaries. Once you've got a raft of sellouts like him in the General election it barely matters who you vote for (though I still vote for the lesser of 2 evils so I can slow things down until the next primary).
Re: (Score:2)
I said this elsewhere on the thread but for God's sake vote, vote in your primary and make your friends and family do the same. Corrupt politicians like Joe Biden [youtube.com] are only vulnerable in primaries. Once you've got a raft of sellouts like him in the General election it barely matters who you vote for (though I still vote for the lesser of 2 evils so I can slow things down until the next primary).
There are >20 Democratic nominees in the primaries. The most electable ones are smaller names like Steve Bullock or John Hickenlooper. The ones getting the press are Biden, Bernie, Harris, and Pete Buttigieg. These are not more generally electable candidates, though I think Bernie could have done it in '16.
I disagree (Score:2)
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It's totally legal, provided both parties agree to it. They are extremely common, and a legitimate way to handle disputes. Courts actually prefer that contract disputes go to arbitration rather than go through the legal process.
It's true that arbitration favors the corporations, which is one reason they like it so much, but it's not a completely one sided thing. The primary benefit is that lawyers are not required to get a fair hearing (there isn't actually much for lawyers to do in arbitration), or at least a "fair enough" hearing for the courts to accept it, so the costs are orders of magnitude less than taking the dispute to court.
Yeah, it's worth noting that the original idea here is actually pro little guy. The big guys have all the money and lawyers and experience.
Obviously there are gaps between ideal and real, but the idea is not intrinsically evil.
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Prepare (Score:3, Insightful)
This is banks version of foreplay before an anal fist fuck.
It's difficult to comprehend the audacity of these kind of agreements and the subversion of a nations legal system in pursuit of robbing a nation's citizens.
This kind of stuff is old hat (Score:1)
It's like folks who will say we need less regulation. When you point out all the bad stuff the regulations stop they will say, without irony, that the stuff doesn't happen anymore. Blissfully ignorant of _why_ those bad things stopped happening...
Price of freedom eternal vigilance yada yada y
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people have been selling themselves into slavery for centuries.
I think now that interest is used to enslave people whilst convincing them it is actually freedom.
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Re: (Score:1, Informative)
That's the problem. (Per the near doubling of sexual assaults in Sweden over the last 10 years.)
Why would anyone use Chase? (Score:5, Informative)
All of the big banks are known anti-consumer asshats. If you're using one, you're just awaiting the inevitable screwing.
Support your local credit union. No, they don't have the marketing and the flash, but they're not going to utterly fuck you over like the big banks. They're not going to sign you up for insurance as part of a giant scam [forbes.com], engage in deceptive marketing, unfair billing practices and deceptive collection practices [magnifymoney.com], nor violate anti-money-laundering laws [americanbanker.com]. Seriously, the big banks are utterly criminal enterprises, but they lobby enough to make sure that they still turn a profit after the fines, and the executives almost never see jail time. And Chase? A $13 BILLION DOLLAR FINE [npr.org] for all the shit they did to make the housing bubble happen and crumble. (But $7 billion was tax-deductible, so there's that.)
Support your local credit unions. They are non-profit, generally decent people, and most likely are looking to make your life better rather than squeezing every last drop of money out of you. Mine prints new credit and debit cards on-demand if I need one, has a very good web portal, has no annual fees for anything, and would rather work with customers than fine them.
It's well past time that the big banks die out. They are hostile, predatory institutions which serve only themselves and their shareholders. Spread the word, and lets put them out of business.
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USAA for current and former military members too. I've been very happy with them for over 30 years.
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What game lol. Category spending? That's not THE game. The real game is signup bonuses and manufactured spending.
Way too much effort. Having to sign up for and cancel cards all the time would be a PITA.
I'm surprised this isn't already in effect (Score:2)
A few months before Chase took over Bank One, I got fed up wish Washington Mutual.
In the interest of keeping this short I won't go into details on how WaMu screwed me over, but they didn't seem to care until I walked in and told them I was closing my account and then the branch manager was begging me for a chance to make things right. It was too late by then.
I switched to Bank One and a month or two after Chase took over them my credit card was rejected. They claimed I hadn't paid my balance. Back then I
Re: (Score:1)
Why would you be using the postal system to pay your card balance anyway? That sounds like something my grandparents would have done 50 years ago.
Most people would pay it online, and receive confirmation that the payment has been received.
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Me? I do it to keep people employed. Not all of check processing can be automated.
Do you also travel everywhere by horse to keep blacksmiths employed?
Besides, when a company wants to charge me $4 for an electronic payment vs making them pay to process my check, which way do you think I'm going to go?
I think most people would find a better bank... Even third world countries provide free methods to electronically pay bills.
Postage is not free either, especially if you pay for delivery proof which you're going to need.
Trust the post office vs trust a company? Hmm. Apps can be hacked. Phones and tables can be stolen. Snail mail, not so much.
I bet your grandparents never had to worry about their smart phone getting hacked or stolen 50 years ago either.
Mail is subject to unreliability (as you found out), delays, and yes crime also happens. And you still have to trust the company, what's to stop them losing your payment or just throwing it in the shredder so they can penali
How much further..... (Score:1)
Why is arbitration so popular? (Score:2, Troll)
Forced arbitration where the the company gets to pick and pay the arbiter is so blatantly unfair that it's embarrassingly ridiculous. So, why do these provision exist? Why not simply instead include a clause that says that in the case of any disputes, the customer is always wrong. Such a clause would be more clear and efficient. The banks would save money by not have to spend money to pay unneeded arbiters, and customers would benefit from not being subjected to a farce. Is there a law that actually ma
Re: (Score:3)
Actually, the company does not get to pick.
https://law.freeadvice.com/lit... [freeadvice.com]
Small Claims is Better (Score:2)
" Most importantly, it means that cardholders cannot come together and levy a class action suit against the bank."
Clearly, the AC that submitted this is probably a lawyer. They're the only ones who lose out when class actions can't be done...consumers only get pennies, points or some other useless scratch while the attorneys get rich. You'd be better off taking them to small claims...at least you'd get something for your time.
What was quiet? (Score:2)
I am altering the deal (Score:2)
Pray I don't alter it any further.
It's interesting that a few weeks ago, our local news station ran a public interest bit about how cancelling cards could be bad for your credit rating. Paid for news release?
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