HSBC and wholly owned subsidiary Household International still make the borrower submit to binding mandatory arbitration. CitiGroup does so as well.
While Household - HSBC contends that binding arbitration makes it easier for the consumer to get results and “funds” it does not look at the statistical results of binding arbitration.
Similar to knowing which cards have been removed from the deck while trying to play poker, binding arbitration allows predatory lenders to play outside the box on a playing field that is neither level nor fair.
In the case of Household’s late application of payments (Shea vs Household) or the nationwide $484 million settlement, binding arbitration allows the predator to calculate earnings based on net aceptable losses as a result of illegal activities.
Having said that, consumers must realize that applying payments late for almost 10 years earned the company billions. With the consumer limitd to mandatory binding arbitration, is a net settlement paid by Household - HSBC of $11 million acceptable? Of course.
On Household’s website and in CitiGroup’s best practices one finds the reference to binding arbitration. However, Household’s website states that they find predatory lending “abhorrent” - a statement credited to Gary Gilmer, made well before Household was caught with Aldinger’s drawers down. Best practices policy or not, HSBC is trying to put a nice gloss on what is still a bad name within HSBC North America.
HSBC stated that exportation of the Household lending model would result in profits for HSBC. Will binding arbitration be exported as well?
Here is a supplemental consumer complaint submitted to our organization:
“I called an attorney yesterday because Household Bank has violated the Fair Credit Billing Act. They have sent a negative credit report to the credit bureau while I was disputing the charges on my account. I have followed the course of the law perfectly in dealing with this matter. The lawyer said I had a good case against them and would like to pursue a class action lawsuit. He said the only problem could be the binding arbitration clause in the contract. Has anybody else tried to sue but couldn’t because of the arbitration clause?”
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