“If your credit card company has a beef against you, justified or not, you’re toast.”
This quote is the conclusion of a great article in Forbes magazine. That's right, Forbes (click here). But don't skip to the end of the article, read the whole thing. It begins with a spotlight on yet another consumer/victim of corporate abuse by way of mandatory arbitration. Here's a sneak peak:
On Nov. 15, 2001, a New Hampshire man named Troy T. Cornock received a surprising letter from something called "National Arbitration Forum." Seems this organization claimed he owed money on an MBNA credit card. Only one problem: He didn't. His ex-wife had made the charges, and Cornock pointed out to the "Forum" that he had never signed a credit card agreement or made any charges on the account.
The credit card company could produce no proof Cornock had opened the account or made any charges. Not to worry. The National Arbitration Forum ruled against the customer anyway, and awarded MBNA $9,446.85.
This monstrosity, overturned last March by a New Hampshire court, is just one of literally thousands of instances in which the credit card industry has flushed the Constitution--and the requirement for due process of law--down the commode.
Mandatory arbitration clauses, which are widely criticized for preventing brokerage customers from having their day in court, have metastasized to ordinary credit card agreements. This has resulted in inequities and injustices that makes securities arbitration seem like a fairyland of justice by comparison.
This article is yet more proof of the need for access to the courts, where decisionmakers are held accountable and where the process is a matter of public record. And, it gives a well-deserved shout out to Public Citizen for their groundbreaking report on mandatory arbitration of credit card contract disputes.