Consumer
Alert
Consumers
Be Wary of Hidden Arbitration Clauses in Credit Card Contracts
Thousands of consumers are unknowingly being forced into one sided arbitration proceedings to settle disputes with their credit card companies. First USA Bank and MBNA lead the lenders in forcing consumers into arbitration with the National Arbitration Forum (NAF). According to the NAF’s own documents, in cases involving First USA Bank, the consumer prevailed in just 87 (.44%) of 19,705 arbitrations conducted by NAF.
Only a tiny percentage of credit card users actually read the terms of the credit card agreement. Agreements are sometimes sent out as statements stuffed in envelopes with monthly bills. In small print print are legal terms not understandable to most except the most highly educated consumers.
Also, many consumers don't understand that they may give up their rights to any legal claims once they go to arbitration with (NAF). Going to arbitration means a consumer possibility can’t go to court, even if the alleged debt is the result of someone else’s criminal fraud and the consumer is entirely blameless.
Consumers should read the fine print very carefully. Any changes to existing agreements should be carefully reviewed and if arbitration clauses are added or when not included in the previous card agreements, card holders may request to be opted out of the arbitration clause. Contact the card issuer and find out how to opt out.