Credit card debtor rights in Illinois

According to the Consumer Financial Protection Bureau, credit card companies have taken steps to limit consumer rights in the event of a credit card dispute. Instead of allowing consumers to proceed with traditional lawsuits, customers are required to submit claims to an arbitrator. In most cases, the arbitration process is more favorable to the credit card companies. It is believed that as many as 80 million credit card customers are covered by arbitration clauses.

Data from arbitration cases from 2010 to 2012 shows that consumers were granted in total less than $175,000 in damages and $190,000 in debt forbearance. However, credit card companies won awards that totaled $2.8 million, mostly in cases over disputed debt. Another benefit of arbitration to credit card companies is that it can be used to block class action lawsuits.

Credit card companies say that arbitration is less costly and makes it easier to resolve disputes. Conversely, the CFPB says that there is no evidence that it lowers costs to consumers or offers them access to higher lines of credit. In addition, these clauses are hard for many consumers to understand. Almost 75 percent of customers surveyed didn't know if there was an arbitration clause in their contract. Of those who said they did know, over half were wrong about whether their was in fact a clause in their credit card agreement.

Consumers who have been the victim of predatory lenders or are otherwise struggling with creditors may wish to consider bankruptcy. Bankruptcy may make it easier to have credit card debt discharged or make it easier to cease contact with creditors. If a bankruptcy petition is granted, a judge will order an automatic stay of all creditor actions such as a lawsuit, foreclosure or repossession.

Source: Credit.com, "Consumer Watchdog Says You Should Be Able to Sue Your Credit Card Company", Bob Sullivan, March 12, 2015

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