Credit card debt is a significant problem for many Californians, and debt can quickly balloon when credit card companies charge additional fees or change interest rates. Even if a credit card company engages in actions that might constitute the basis for a lawsuit, however, most companies have mandatory arbitration clauses in their credit card agreements, preventing consumers from suing in court.
In a study performed by the Consumer Financial Protection Bureau, it was shown that arbitration regarding credit card debt strongly favors the company over the consumer. The CFPB reviewed data from 2010 to 2012 in 1,847 cases. Out of the 1,060 filed in 2010 and 2011, arbitrators ordered consumers to pay more than $2.8 million to the companies while awarding consumers an aggregate of less than $175,000 in damages. Consumers were also awarded less than $190,000 in debt forbearance through arbitration.