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December 3, 2012

AMEX Allows You to Opt-Out of Mandatory Arbitration

Filed under: Finance — Edgar (aka MrConsumer) @ 5:35 am

In a rather unusual move, American Express is letting cardholders opt-out of the mandatory arbitration provision in their credit card agreements.



The rejection notice (a sample is here) must be mailed by February 15, 2013 or 45 days after you make your first purchase with the card, whichever is later.

They are also instituting a mediation program to resolve disputes. But, the new agreement requires if you are not able to resolve the problem with customer service, that you file a notice with them before resorting to mediation, arbitration or court.

Why did AMEX decide to let you opt-out of required arbitration?

One consumer lawyer put it this way: “Just another attempt to make the arbitration provision bulletproof. What could be fairer than giving consumers the choice to opt-out?”

Everyone knows that opt-out rates are very low, and since there is a relatively short deadline, few people are likely to do it. The result: virtually all cardholders will be left without the legal remedy of going to court over a major problem (or be part of a class action for smaller but widespread issues).

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  1. Even when they seem to be doing something good, it’s bad. The unfortunate way of business.

    Comment by Wayne R — December 3, 2012 @ 8:49 am
  2. I just really don’t see how a company is allowed to put a “rule” in their clauses that says you can not take them to court.

    Can I do that as a person? Unless you inform me in writing to “opt out” you can never sue me, you have to go through arbitration where I pick the arbitrator.

    I am just so sick of all the “protection” all these big companies have. Even when they are found guilty, all they do is continue to fight it for years and years. The winners are the lawyers as they get to make money “forever”.

    Comment by Mindy — December 3, 2012 @ 10:12 am
  3. This is the same problem with the CA Teachers Union…you can opt-out of them taking your money and using it for whatever political purposes they want (whether it benefits the members or not…typically just the union leaders), but the process is very convoluted and difficult to determine and apply.

    What I think would be much better is an opt-in strategy but, of course, that would not be to the company’s (or union’s) advantage.

    This would be much better consumer protection: “if you would like to opt-in for arbitration, please contact us by Feb 28, 2013 stating as such.”

    Comment by RobS — December 3, 2012 @ 11:38 am
  4. Thank you for the wonderful information you provide.

    I had to read it several times to “get” it. Hard to believe my eyes.

    Will definitely be one of the few to mail in the Arbitration Rejection Notice.

    Comment by Joan Greenberg — December 3, 2012 @ 12:03 pm
  5. You’re not alone, Joan. I too read it a few times, to fully “get it”, since it seemed counter-intuitive. My form is going out tomorrow. My overly cynical self will mail it Return Receipt.

    Comment by Marty — December 3, 2012 @ 5:49 pm
  6. I opted out of arbitration with my bank years ago but have discovered that this only covers the services I had at the time of opt out (checking, savings credit card) and I’d have to opt back into arbitration if I want any other service (like electronic document delivery) from the bank. Don’t make the same mistake I made — first sign up for all the services you want, then opt out because your opt-out will only cover the services you had at the time of opt out.

    Comment by anonymous — December 4, 2012 @ 3:05 pm

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