Big Banks Blocking Customer Lawsuits With Arbitration

Big banks are increasingly using the fine print of checking account agreements to get customers to sign off on arbitration. Over the last four years, the share of 29 big banks that use binding arbitration clauses has risen by 12 percent, to 72 percent, according to a Pew Charitable Trusts analysis. Most of the banks also include language barring customers from taking part in class-action lawsuits. That leaves customers without much recourse, and little incentive to fight over small amounts of money. A New York Times investigation found that between 2010 and 2014, only 505 customers went to arbitration over a dispute of $2,500 or less. Most customers – 95 percent, according to Pew – want to keep their right to sue a bank, and join class-actions.