The Supreme Court this month affirmed the right of credit card companies to deny you the ability to take them to court, leaving consumers with little recourse to fight back against abusive practices and deceptive contracts.
Consumers have few options to avoid binding arbitration clauses
Arbitration clauses proliferating for all manner of products
Arbitration Fairness Act in Congress could restore people’s right to fairly collect damages
No Day in Court
In an eight to one decision in the case CompuCredit v. Greenwood, the Supreme Court ruled that consumers could not sue their credit card company for deceptive language and hidden fees, because of a small-print clause in their contracts mandating that disputes be settled by binding arbitration, not lawsuit.
The plaintiffs had hoped that the 1996 Credit Repair Organization Act, aimed at stopping deceptive credit card practices, would allow them to be heard in front of a jury. Not so, said the court—nothing in the act decisively prevents companies from including binding arbitration in contracts, even though the CROA explicitly says consumers have the right to sue. “Had Congress meant to prohibit these very common provisions in the CROA, it would have done so in a manner less obtuse,” wrote majority opinion author Justice Antonin Scalia.
That means if you want to use a credit card, you have to play by the company’s rules. Worse, binding arbitration agreements are popping up in contracts for all kinds of other products as well, often as agreements you don’t even have to sign. The CompuCredit v. Greenwood decision continues a disturbing pattern of courts upholding the right of companies in any number of circumstances to preclude lawsuits and erode the right of consumers to have their day in court.
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