Bank of America no longer requires arbitration to settle disputes
Bank of America has changed its policy that required binding arbitration between its credit card holders and banking customers and the bank. Bank of America made the decision in reaction to customer complaints that arbitration favors banks rather than the individual customer.
According to Bank of America spokeswoman Shirley Norton, the new rule change is effective for new disputes beginning Aug. 20. She also said that the company believed that arbitration is fair, but it was clear that some customers felt that it wasn’t.
The new law will allow for lawsuits against the bank but the company hopes that by listening to customer complaints and making changes, they will be able to settle more disputes with customers directly.
The practice to require binding arbitration is a common banking practice to protect against potentially more costly lawsuits.
This sounds like great news at first. When you examine it however, not so much. They still prohibit customers from banning together for class action lawsuits. So that means you would have to individually take them to court, for what amounts to really not much money in most cases. Its just not economically feasible.
What customers are left with is just settling the dispute with Bank of America directly. So instead of having a supposedly unbiased, haha, arbitrator between you and them. Now you have shrugged off that mask of being unbiased.
This is really not going to benefit consumers at all. If you do have a dispute with them, all I can say is good luck with that. Your going to need it.
Check out my blog about Bank of America’s lifting of mandatory arbitration at….. http://www.thedebtgazette.com/2009/08/bank-of-america-disputes/
That’s great info – thanks for sharing it. Do you know what other retail banking institutions offer in the way of dispute settlement? Is BoA slightly better than average now or are they still below the line?