Arbitration Clauses for Credit Cards, Other Services May Harm Consumers

Millions of consumers may not be getting a fair resolution in disputes with their financial institutions over products and services, according to a report released Tuesday by the Consumer Financial Protection Bureau. The CFPB examined the arbitration clauses in contracts for credit cards, prepaid cards, private student loans, payday loans, cellphone service and checking accounts. These clauses generally permit companies to resolve consumer complaints using arbitration. Most bar consumers from filing class-action suits, which may provide a fairer and more …

Payday Loan Fees Often Exceed the Amount Borrowed

If you need more evidence that payday loans can be a debt trap, look no further than today’s report by the Consumer Financial Protection Bureau. The agency found that 4 out of 5 payday loans are renewed or rolled over within two weeks after the end of their term. In half of these cases, the borrower renews the loan at least 10 times in a row. And repeat borrowing may be more expensive than many borrowers may realize. Fees in …