| Volume 70 Number 5 |
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The People’s Lawyer’s Tip of the Day
All banks are not created equal. Their services may be the same but prices are not. Shop around. Ask about free checking and online banking. Find out what the rate of interest is on deposits and what they charge for bounced checks, stop-payment orders and other services. Set up a line of credit instead of agreeing to "free" over-draft protection. A little comparative shopping can save you hundreds of dollars a year. Click here for more.
Consumer Credit Card Debt Drops 11%
2011 was a good year for consumers with credit card debt. According to a national credit tracking firm, the average credit card balance dropped from $7,404 to $6,576. Average debt loads dropped in every state. Industry experts suggest weak consumer confidence likely kept consumer spending in check. As the economy continues to recover and banks continue to loosen credit requirements, credit card debt will likely pick up again. For a look at national credit trends, Click here for more.
Credit Card Arbitration Trumps Lawsuits
Have you ever signed an arbitration agreement? Did you answer "no?" Do you have a credit card? If so, change your answer to "yes." In order to get a credit card, a consumer is required to sign a detailed agreement. Deep within the fine print, a consumer with find the arbitration clause. What does the clause mean? If you have just about any type of dispute with the credit card company, you may not take the dispute to court. In fact, you may only take your complaints to arbitration. Want to dispute unreasonable fees? Court just isn't an option. A 1996 federal law allowed consumers to take their disputes to court, and consumers used this law to challenge mandatory binding arbitration provisions in their credit card agreements. Unfortunately, by a vote of 8 to 1, the United States Supreme Court found that the arbitration provision trumps federal law. Representatives of the National Consumer Law Center say arbitrators have a financial incentive to rule against consumers. Find out why! Click here for more.
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For the Lawyers
Arbitration clause in job application is unenforceable. The California Court of Appeals held that an employer could not enforce an arbitration clause in its job applications when sued for violating state wage and hour law. The court concluded that the arbitration clause was unfairly one-sided and otherwise unconscionable. “[E]ven though the plaintiffs undoubtedly saw the arbitration paragraph when they initialed it, their declarations state they did not know what ‘binding arbitration’ meant, no one explained it to them, and they were unaware they were giving up their right to trial. There was no evidence any of the plaintiffs were sophisticated in legal matters. This, combined with the non-negotiable, take-it-or-leave-it circumstances surrounding the application for employment, result in a strong showing of procedural unconscionability.” Click here for more.