Congress should end this rip-off
BY MARTIN DYCKMAN
Published: May 9, 2013   |
Updated: May 9, 2013 at 12:29 PM
The mail brought a pleasant surprise, a check for $30 or so. It was from some lawyers I didn't know and hadn't ever talked to. But with my passive consent — that is, by my not objecting to the notice of class action lawsuit that I had received, they had represented me — and many thousands of others against a big, bad bank.
They had sniffed out what appeared to be rampant overcharging in calculating the exchange rates when we had used its credit card overseas. The card company denied the allegation but agreed to settle for a large sum.
If the government didn't care to hold big, bad banks to a decent standard of conduct, it was good that somebody was willing to try. The class action lawsuit is just about the only means available to the public. The new Office of Financial Regulation is intended to fill that role, which is why the Republican Party won't let anyone be confirmed as its director.
The fine print in the notices you have likely received from your credit card companies lately imposes new terms on your contracts with them. By continuing to use those cards, you are not only agreeing to submit any claim to an arbitrator of their choice; you are also waiving any right to participate in or benefit from a class-action lawsuit.
One of my credit cards gave me the option of declining the new terms. They know most customers will ignore the notice and surrender their rights. The critical mass of cardholders necessary to bring any effective class action will not exist.
Forcing customers to waive the right to go to court has long been a favorite trick of stock brokers. Waiving your right to participate in a class action is a more powerful wrinkle on that. Can we count on Congress to put a stop to this?
Martin Dyckman is a retired associate editor of the newspaper formerly known as the St. Petersburg Times.