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The Arbitration Trap: How Credit Card Companies Ensnare Consumers

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Publication Date: September 2007

Publisher(s): Public Citizen, inc.

Author(s): Laura MacCleery; Taylor Lincoln; John O'Donnell

Topic: Banking and finance (Credit and loans)
Banking and finance (Personal finance and saving)
Economics (Consumers and consumption)
Justice (Legal procedure)
Law and ethics (Civil law)

Keywords: credit card; court; consumer; arbitration

Type: Report

Coverage: United States

Abstract:

This report details how arbitration firms and credit card companies enjoy a cozy, mutually beneficial relationship at the expense of consumers they force into binding mandatory arbitration. Using data from California, the findings provide a glimpse of how arbitration traps consumers throughout the country in unfair, secret proceedings where for-profit arbitrators make the rules. Public Citizen's research uncovered consumers who spent years fending off collection agencies, cleaning up identity theft messes and struggling to bounce back from credit rating hits.