B of A Loses a Round in Keeping Disputes Out of Court

cannot force credit card customers to resolve disputes through arbitration. The California Court of Appeals in San Francisco last week said that the bank cannot change terms that were stipulated in an original account agreement. The suit was filed in 1992 by Consumer Action, a San Francisco-based advocacy group, along with the California Trial Lawyers Association and four customers as plaintiffs. According to the suit, Bank of America credit card customers were notified in a statement insert that they could not go to court to resolve disputes with the bank. They were told they had to submit to arbitration, which is generally faster and less expensive for the bank. In an earlier decision, a San Francisco Superior Court judge ruled in favor of Bank of America, saying the account agreement allowed the change. But the appellate panel reversed the decision, saying an envelope stuffer was not sufficient for a major policy change. A Bank of America spokes-man was unavailable. According to press reports, the bank is considering an appeal.

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