Consumers can now sue banks in class-action lawsuits.
The Consumer Financial Protection Bureau said Monday financial companies will no longer be allowed to force customers to use arbitration to settle group disputes, restricting the industry’s favored legal tool after years of review.
Currently, credit card and bank companies often insert arbitration clauses in their contracts to prevent consumers from banding together to file class-action lawsuits over scams and fraudulent products. Harmed individuals who seek remedy – often in small amounts — are forced to sue on their own in small claims court, discouraging many lawsuits from consumers who deem them not worthy of their time, money and effort.
