JPMorgan Chase & Co., the largest credit card lender, will remove clauses from its contracts that force consumers into arbitration. The attorneys at Levin & Perconti were very pleased when we learned about this JP Morgan Chase decision. The American Association for Justice issued a statement explaining that this decision is a large win for consumers, who previously had no recourse because of rigged forced arbitration proceedings. Forced arbitration is when you are forced to settle a dispute outside of court, AAJ adds that unfortunately other lenders and corporations still insist on forcing their employees or customers into one-sided arbitrations to escape accountability.
Levin & Perconti recently blogged about a study issued by Public Citizen about the prevalence of forced arbitration. The study showed that in most cases, consumers are stripped of their right to go to court over disputes when they open a bank account, credit card account, obtain cell phone service, hire a stockbroker, or buy a house.
Not only is forced arbitration unfair, it’s also extremely unpopular. A recent national survey showed that a commanding majority of Americans oppose the practice of forced arbitration. Almost six in ten voters support the Arbitration Fairness Act, which aims to halt forced arbitration in Terms of Employment and Terms of Agreement for goods and services.
Until the Act passes or other meaningful change occurs, please beware of arbitration clauses. Almost all of the contracts that an ordinary consumer is faced with contains a mandatory arbitration clause.
AAJ’s statement on JP Morgan Chase & Co.’s announcement is available here.