Did major credit card firms conspire to change their member agreements and limit consumer rights? Consumers may find out now that a federal appeals court has revived a class-action lawsuit alleging such anti-competitive practices by banks.


In 2005, a lawsuit was filed against a "Who's Who"? of credit card issuers, claiming the companies colluded to limit consumers' rights by implementing mandatory arbitration clauses. The banks even formed an "Arbitration Coalition"? and swapped tips on writing enforceable agreements, the lawsuit alleges.

But it was dismissed by the U.S. District Court for the Southern District of New York in 2006, when that court ruled the plaintiffs were unable to prove consumers had suffered any harm. In legal terms, the court found the plaintiffs did not have "standing"? -- that is, without identifiable harm, there was no legal claim to argue.

On Friday, the U.S. Court of Appeals in New York reversed that decision, agreeing with the plaintiffs' that it is feasible to prove cardholders had been harmed through a lack of competition. Specifically, the court found the plaintiffs might be able to prove that a card which "limits the holder to arbitration is less valuable ... than a card that offers the holder a choice between court action or arbitration," and that cardholders may have "been forced to accept a less valuable card as a result of the banks' alleged collusion."

http://redtape.msnbc.com/2008/04/did-banks-collu.html
Comments on the story?

Being an Ex-Branch Manager and Asst. Vice President I can say without a doubt that banks, or as we would say the people sitting in the "Ivory Towers", did make policy to collude against consumers in trying to make profits rise. Almost every policy was intended to do so, not in writing, but in structure of the policy.
By cleverly and constantly "tweaking" the policy, the consumer would slowly and without feeling it, loose more to the bank gaining more. That is what the bank was striving for, and now that they have that, or close to complete control over consumers, they just sit back behing a wall of policy and legislators, who also through lobbyists, made out well.
But it is not over yet, with the economic crisis looming, the consumers should be waiting for the other shoe to drop. But the proplem is is that we allowed it to happen, the consumers were considered sheep to be led, because of the other pre-occupations the banks counted on.
We let it happen, just like gas consumption, food prices and letting jobs slip away overseas.
We did it to ourselves and sold ourselves short because we just "didn't have the time"! "I have beena bank customer for years, they would not do that to ME!!!"Wake up Americans!
I can go on for hours on this, and write several GOOD books on this topic!
John Jelinski, Barnegat, NJ