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Friday, November 20, 2009

JPMorgan Chase Halts Arbitration Activity

FOXBusiness

JPMorgan Chase & Co. (JPM) has reached a tentative settlement with plaintiffs in a lawsuit accusing the bank and other financial institutions of conspiring to force cardholders to resolve credit-card disagreements out of court, according to reports.

The bank agreed to remove the arbitration clauses from credit-card contracts, Dow Jones reported, Friday. A Chase spokesman told Dow Jones on Friday that the bank stopped sending debt collection cases to arbitration in July and thus decided to remove the arbitration clauses.

“JPMorgan's decision is a win for consumers, who previously had no recourse because of rigged forced arbitration proceedings,” the American Association for Justice, a lawyer’s association said in a statement, in response to the bank’s announcement. “Unfortunately, other lenders and corporations outside the financial sector still insist on forcing their employees or customers into one-sided arbitrations to escape accountability."

Shares of JPMorgan Chase fell 9 cents or 0.21% in Friday’s session, before falling another 4 cents in after-hours.

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