Complain about a product or service

Fleet, Citigroup, MBNA Impose
No-Lawsuit Clause On Cardholders

May 11, 2001
There's nothing subtle about the FleetBoston Financial Corp.'s defense against several consumer class-action suits. The bank recently mailed its credit card customers new cardholder agreements under which the customers agree not to sue the bank individually and not to be a party to any class-action lawsuit. Nothing if not audacious, Fleet made the provision retroactive.

Other large banks are following suit. Citigroup Inc. and MBNA Corp. are also issuing new cardholder agreements that prohibit their customers from suing them, requiring them to submit all disputes to binding arbitration. The new agreements also say consumers are barred from banding together to bring a class-action suit, the traditional way of handling a large number of relatively small claims.

The sweeping actions will, if successful, disqualify millions of consumers from exercising their constitutional right to sue.

Whether the courts will uphold the banks' action is open to question. In a similar case in 1998, a Portland, Ore., judge threw out a similar clause imposed by Bank One Corp.'s First USA Division. Legal scholars say it's unclear whether businesses have the power to prohibit class-action lawsuits by unilaterally altering an agreement.

Fleet's motivation is clear. It's already fighting more than a dozen lawsuits seeking certification as class actions. Most of the pending actions accuse Fleet of misleading customers about interest rates.

In Florida, a federal suit has been filed contesting the retroactive clause, among other issues. And a similar suit was filed recently in state court contesting similar clauses imposed by MBNA and First Union Corp.

Back to the top | Consumer News 2001

Home | Rogues Gallery | Good Guys | Complaint Form | News | Recalls | Search | Video | FAQ |
Consumer Resources | Small Claims Guide | Lemon Law | Newsletter | Contact Us
Advertise With Us | Testimonials | Newsroom | RSS Feeds | Radio | Job Postings

Terms of Use Your use of this site constitutes acceptance of the Terms of Use

Advertisements on this site are placed and controlled by outside advertising networks. ConsumerAffairs.com does not evaluate or endorse the products and services advertised. See the FAQ for more information.

Company Response Welcome If complaints about your company appear on our site, we welcome your response. Please see the Response Form for more information.

For more information, see the FAQ and privacy policy. The information on this Web site is general in nature and is not intended as a substitute for competent legal advice.  ConsumerAffairs.com Inc. makes no representation as to the accuracy of the information herein provided and assumes no liability for any damages or loss arising from the use thereof. 

Copyright © 2003-2008 ConsumerAffairs.com Inc.  All Rights Reserved.