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Bank of America Corp. is abandoning the controversial practice of mandatory arbitration in its consumer businesses, including credit cards.
"Our consumer businesses will no longer enforce mandatory arbitration in new banking disputes," Betty Riess, a B of A spokeswoman, said Thursday afternoon. "We do believe arbitration is a fair means of resolving consumer disputes, but we decided it was best for our customers and for the company to discontinue the practice in our core consumer businesses."
The decision will take effect later this year, as soon as the Charlotte banking company updates its agreements, she said. It will apply to credit cards, auto loans and all other consumer financial products. (B of A eliminated arbitration from its mortgages and home equity lines of credit "several years ago," according to Riess.)
In the future, "if we are unable to resolve the dispute with the customer directly, the parties will have the right to resolve the dispute in other ways," including through the court system, she said.
