Yet again, Congress has given multi-billion dollar banks more control over your daily life. Yesterday Congress repealed a rule that would make it easier for American citizens to sue banks that had committed fraud or cheated customers.
The Old Arbitration Rule
The old rule was simple – if you signed up for a credit card or a bank loan and you discovered some form of fraud by your bank, you were not forced into arbitration. This rule was valuable to you because it allowed you to get together with other customers who were also wronged and sue your bank as one big class action. Without the rule, you were forced to participate in arbitration if you wanted any chance at recovery.
The New Arbitration Rule
The situation doesn’t seem complicated on the surface but consider this:
- Banks tend to use the same arbitration companies over and over;
- Those arbitration company employees then get cozy with the bank employee (lawyers);
- The statistics show that arbitration overwhelmingly favors the banks, not the customers.
Think about it – you’re a bank who repeatedly hires the same arbitration company. That arbitration company gets paid for each successful arbitration. If that arbitration company consistently rules in favor of the bank that’s hiring it, it ensures that that bank will continue to hire the arbitration company. It is not rocket science – these arbitration companies are clearly in the pocket of the banks that force their customers to use them.
Use Bankruptcy or Debt Relief to Fight the Arbitration Clause
Federal Bankruptcy Law is not subject to these arbitration clauses. You can file Chapter 7 Bankruptcy or Chapter 13 Bankruptcy and the big banks have no recourse against you as far arbitration clauses are concerned. Additionally, non-Bankruptcy options like Debt Relief can sidestep arbitration clauses by dealing directly with the creditor or the creditor’s attorney.
The Bottom Line….
If you feel like you were wronged by a bank there is a good chance that your complaint might be subject to an arbitration. If that is the case, you need to seek legal counsel. Your bank likely already knows its rights. Do you? You can’t afford to “take a knife to a gunfight.”
Call The Law Offices of Dax J. Miller today for a free consultation.
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