Thursday, November 13, 2008

Help Arrives: Appeals Court Rules Against Arbitration in Credit Card Case

Arbitration is bad, really bad! The idea that a judge-for-hire can be just simply boggles the mind. Yet, it happens everyday. It happens to the average person without his knowledge. Here's how.

Whenever you sign up for credit card or open a brokerage account, you -- the consumer -- unknowingly sign an agreement to arbitrate any dispute you may have with the Company. Many times, the arbitration judge is actually named in the account forms, leaving the individual without any say in the matter. Not only is the arbitration judge rented, but he's pre-selected by the Company who prepares the forms that you sign.

Arbitration is a big business. Arbitration firms make hefty sum of money resolving all the disputes against the Company. As you can imagine, consumers more often than not loses. And the big winner is the Company who selects the arbitration judge.

Recently, a federal appeals court has ruled that plaintiffs seeking damages against American Express over an alleged conspiracy to overcharge customers for foreign transactions cannot be forced into arbitration. The 2nd Circuit Court of Appeals found that because American Express was not a signatory to other companies with mandatory arbitration agreements, the plaintiffs could not be compelled to arbitrate. The case is Ross v. American Express Co.

Read: Mark Hamblett, 11/11/2008

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