You have one day to keep your right to sue Chase

Ethan Wolff-Mann
Senior Writer
Unless Chase customers opt out, disputes will be resolved by binding arbitration. (AP Photo/Matt Rourke)

Since 2009, Chase cardholders have had the right to sue the company, if they wanted to.

But after 10 years, the company is revoking the right with an updated agreement, which it announced in June. Instead of joining a class action suit, consumers would be forced to go into an arbitration process, which experts say heavily favors the corporation, not the consumer.

Chase sent notices to customers in early June notifying them of the rule change, and giving them until Aug. 8 – tomorrow – to send a physical letter stating a desire to keep the old agreement.

The bank is updating all but one class of credit cards — the AARP products — to include a “binding arbitration” agreement, which requires a customer settle disputes through a private, extra-judicial system, which has the consequence of prohibiting customers from joining together in a class-action suit against the company.

“With arbitration, you cannot go to court, have a jury trial or initiate or participate in a class action for your dispute(s) with us,” the revised agreement says. “In arbitration, disputes are resolved by an arbitrator, not a judge or jury, and procedures are simpler and more limited than rules applicable in court.”

To opt out of the agreement, cardholders must send a physical letter to Chase with account numbers of the cards, address, and signature, stating that you “reject this agreement to arbitrate.” (Mail letters to Chase at P.O. Box 15298, Wilmington, DE 19850-5298.)

Unfortunately, Chase (JPM) does not allow opting out online despite the fact that you can apply for a credit card online, cancel it online, receive paperless statements online, and pay off card balances online.

This is likely a strategy. Chase benefits from this agreement as it shields the company from class-action lawsuits. Chase told Yahoo Finance in June there is no online version because the company wants “to make sure we captured our customers’ preferences accurately.”

Chase cards used to have these provisions. However, Chase, Bank of America, HSBC, and Capital One dropped forced arbitration in 2009, after a settlement.

A 2015 study of forced arbitration by the Consumer Financial Protection Bureau found that 15.8% of card issuers have arbitration clauses.

A Chase spokesperson said: “Our experience in Consumer Banking and Auto Finance has been that it’s often faster, easier, and less expensive,” referring to forced arbitration.

Ethan Wolff-Mann is a writer at Yahoo Finance focusing on consumer issues, personal finance, retail, airlines, and more. Follow him on Twitter @ewolffmann.

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