The San Francisco City Attorney’s Office has settled its case with FIA Card Services, a credit card issuer and subsidiary of Bank of America. The case involved allegations that FIA forced consumers into binding arbitrations with the National Arbitration Forum (NAF), a notoriously anti-consumer forum in which statistics have shown that less than 2/10 of 1% of consumers prevailed in their proceedings. The City Attorney further alleged that FIA used its arbitration awards to extract unwarranted attorney fees, costs and other amounts from consumers.
The terms of the settlement include:
- A one-time settlement payment of $5 million by FIA.
- FIA will not arbitrate consumer credit card collections in California for two years.
- FIA will not use the NAF in arbitrations with its card holders for at least five years,
- FIA will not enforce unconfirmed arbitration awards obtained through NAF.
- FIA cannot bar consumer class actions challenging FIA’s practices.
You can read more about the settlement here.