Chase, Nation's Top Credit Card Issuer, Ends Mandatory Arbitration

Chase Chief Executive Jamie Dimon JPMorgan Chase, the nation’s top credit card lender, said today it will no longer require customers to settle disputes through arbitration, a practice that lawmakers and consumer advocates claim to nearly always favor the credit card companies.
The Chase decision comes three months after a similar move by Bank of America.
“Our decision is the right thing for our customers and our business and reflects our commitment to clearer and simpler communication with our customers,” Chase spokesman Paul Hartwick said in an e-mail.
Chase stopped the arbitration process for disputes in July, Hartwick said today. 
Long-time critics of mandatory arbitration contend a heavy bias toward card companies. Consumers are often confused and misled, the critics say, because card holders often don’t realize that they waive the right to sue when they accept their account terms. The move by Chase to end arbitration could result in more lawsuit filings against the New York-based financial giant.
Chase’s decision to drop arbitration was part of a tentative settlement in a lawsuit that accused credit card divisions of Chase, Bank of America, Capital One, Citigroup and Discover Financial Services, HSBC Holdings and others of violating antitrust laws. The suit contended that they  secretly consulting each other on strategies to require cardholders to arbitrate all disputes, plaintiff law firm Berger & Montague PC said Friday.
Cardholder advocates hailed the decision as a major victory.
“JP Morgan’s decision is a win for consumers, who previously had no recourse because of rigged forced arbitration proceedings,” said Anthony Tarricone, president of American Association for Justice President, formerly known as the Association of Trial Lawyers of America. “Unfortunately, other lenders and corporations outside the financial sector still insist on forcing their employees or customers into one-sided arbitrations to escape accountability.”
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