Payment Card News

Stacked Deck

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While the U.S. Congress has recently and successfully banned some egregious practices in the credit card industry, there are still more issues that may possibly be addressed in the months ahead such as mandatory arbitration clauses, interest rate caps and merchant fee pricing. A new report suggests that mandatory arbitration by credit card issuers and financial institutions is unfair to consumers. The Center for Responsible Lending says that aside from the high frequency of hidden clauses requiring consumers use arbitration rather than courts for complaints, the “Stacked Deck” report also discloses factors such as favoritism/incentive among arbitrators to favor the firms providing repeat business over the consumer, companies in favorable rulings in arbitration over consumers and companies frequently involved in arbitration cases receive more favorable rulings against consumers than those involved in fewer cases. CRL recommends that borrowers try to opt-out of arbitration clauses and remember that such clauses may not always be enforceable. For more information visit:
“http://www.responsiblelending.org/credit-cards/research-analysis/stacked_deck.pdf”:http://www.responsiblelending.org/credit-cards/research-analysis/stacked_deck.pdf

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