Parties to a contract often like arbitration clauses because they offer a cheaper and easier resolution to disputes than formal litigation. However, credit-card companies typically dictate the terms of the agreement for consumer debts and hire arbitration companies to handle all of their customer's disputes.
The Wall Street Journal reported last weekend that JP Morgan is removing arbitration clauses from their credit-card agreements. This change comes in the wake of several court cases addressing the close relationship the banks enjoy with arbitration companies.
Businessweek reported this summer that the Minnesota Attorney General filed suit against the industy-leading National Arbitration Forum. As Business week reports, "[The Minnesota suit] follows a bias case brought against NAF last year by the San Francisco city attorney in California state court."
-- Patrick Flanagan
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