Taking on ‘Rip-Off Clauses,’ New Proposal Allows Consumers to Join Together to Sue Big Banks
(COMMON DREAMS) Andrea Germanos, May 6, 2016 — A new proposal from the U.S. financial watchdog for consumers has been applauded for its ability to help prevent big banks from evading liability for wrongdoing.
The Consumer Financial Protection Bureau’s proposal, unveiled Thursday, curtails mandatory arbitration clauses in financial products like credit cards, bank accounts, and student loans, thereby affording consumers the power to join together in class action lawsuits to sue a financial company.
As watchdog organization Public Citizen previously explained, “Forced arbitration requires consumers to settle disputes before secretive, private tribunals instead of courts.” Yet this “grossly unfair” practice is ubiquitous, the group found, addingThursday that it’s “an abusive practice in which corporations bury ‘rip-off clauses’ in the fine print of take-it-or-leave-it contracts to block consumers from challenging predatory practices such as hidden fees, fraud and other illegal behavior.”