Tuesday, September 6, 2005

Mandatory Arbitration as Anti-competitive?

A suit filed in New York on August 11, 2005,  by consumers against several banks issuing credit cards alleges that the institutions engaged in collusive activity by requiring customers to engage in mandatory arbitration in lieu of remedies in court.  Since many consumer complaints stem from excessive fees and interest rates,  the mandatory arbitration clause facilitates the ability of the banks to set fees and engage in other price fixing behavior. 


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