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Possible Changes to Contract Language may Make it Easier to Sue your Bank

classActionIf you read the fine print on a contract you sign with a bank, a credit card company or even payday lenders, you may notice terms explicitly barring you from joining a class-action lawsuit against that company. If Federal regulators have their way, this contract language will soon be banned. The Consumer Financial Protection Bureau is currently evaluating arguments by those who are for and against the new ban.

Groups supporting consumers clearly are in favor of the ban, stating that arbitration clauses in standard contracts do not allow consumers that have been wronged from being able to seek justice in court.  Industry groups believe that arbitration is a better, less costly option than a class action.

Arbitration clauses specifically ban groups of customers from filing lawsuits against companies when they violate the law. These clauses could potentially be viewed as a way to avoid accountability among banks, debt relief scammers or payday lenders. Unfortunately many consumers fail to read or don’t completely understand what they’re signing up for when they enter into these contracts but an arbitration clause could mean that if something goes wrong the consumer has essentially signed away his/her right to seek justice in court. The Consumer Financial Protection Bureau’s decision may make it easier for consumers to sue companies and corporations for illegal and harmful behavior. 

This update is provided by Miami bankruptcy attorney Alonso, Perez & Santos, LLP.  Our areas of practice are bankruptcy, debt harassment, credit card defense, foreclosure defense and also include insurance litigation, construction law, immigration law, business start-ups, and more.  Call 305-676-7545 to speak with a lawyer regarding your contract dispute.  We look forward to working with you.

This information is provided for educational or informational purposes only and should not be construed as legal advice. The information is not provided in the course of an attorney-client relationship and is not intended to substitute for legal advice.