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Tuesday, April 29, 2008

The collusion of banks.

Link to Article: http://redtape.msnbc.com/2008/04/did-banks-collu.html

The big credit card companies are now under fire for supposedly colluding together to change their members agreements to having all their members sign arbitration clauses to the contracts. This way when a dispute arises, it has to be settled in arbitration and not the court. The plaintiffs in this case are arguing that the major banks created the “arbitration coalition” to all agree to change their member contracts. The first court dismissed the case saying, there was no proof that consumers were harmed, which follows in line with anti-trust laws. However, the appeals court ruled that consumers could be hurt by change in the contract because (here is the courts thought) that having a card that only allows arbitration could be thought of as less valuable then a card that allows disputes to be handled in the courts. And by “forcing” customers to have the less valuable card could be seen as harm.

Yeah the whole “forcing” a customer to a less valuable card seems to be making a stretch. I personally have never been forced to have a credit card. In fact, I closed my Capital One card just last month because I didn’t want to pay the annual fee that was going to be charged this month and I wasn’t forced to stay with them at all. I then choose to go to a credit union and got a credit card there, with no annual fees or arbitration clause, wooo the power of choice. If the credit card companies did collude and it harmed the consumer then they should be charged, but if it was just them finding a good way for them to save their butts from frivolous law suits and was in their best interests to follow what the industry was doing then I don’t see why they should be charged. I don’t think there was any harm in what they did. Most of the people writing comments to this article below it, say that finally the big bad credit companies are going to get it. Haha I doubt it, they were just finding ways (within the law) to make more money. Apparently there is no law against signing away your right to a trial. Most of the people posting want the companies to change their contracts so they will get their fair trial in the court. My suggestion is that it’s the government that enforces these contracts and if the people don’t like the law allowing people sign away their right to a trial, I say look to the government to take away one more right. The credit card companies are just doing what they can to make a profit. Just like each and every one of us does every day. They found a way to save them time or money by adding this clause to their contracts and the government enforces it. If you don’t like what they do, go somewhere else. If you don’t like the law, vote to change it. And remember, read the fine print.

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