Did Credit-Card Companies Collude to Force Arbitration?

[David A. Szwak]

Did credit-card companies collude to force arbitration?

Thursday, September 01, 2005 By Carrick Mollenkamp, The Wall Street Journal

Many of the largest U.S. credit-card companies require customers to sign away their ability to take disputes to court and instead settle disagreements in arbitration.

Now that practice itself is under attack in court. A lawsuit filed recently in federal court in New York City alleges the credit-card companies held secret meetings where they colluded to promote arbitration, in violation of federal antitrust laws.

The complaint alleges that eight of the nation’s biggest card issuers -- Bank of
America Corp., Capital One Financial Corp., J.P. Morgan Chase & Co.,
Morgan Stanley’s Discover unit, Citigroup Inc., MBNA Corp., Providian Financial
Corp. and HSBC Holdings PLC of the United Kingdom—“combined, conspired and agreed to implement and/or maintain mandatory arbitration.â€