Last Chance to Opt Out of Chase's Binding Arbitration

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If you have a credit card issued by Chase, in May you should have received an email from Chase with the subject line, “Important information regarding changes to your Chase account”. In said email you were informed that Chase will alter your cardmember agreement to include a legal provision called binding arbitration as of early August. That basically means that you waive your right to participate in class-action lawsuits against Chase, and agree to settle any disputes outside of a court using a private third party arbitrator–that should be unbiased but often is paid by Chase–as opposed to a judge. Chase is immunizing themselves from class action litigation.

There is one exception to settlements inside courts. The email states, “…you have the right to file and pursue a Claim in a small claims court instead of arbitration if the Claim is in that court’s jurisdiction and proceeds on an individual basis. “

You have the option to opt out, but you need to act soon if you haven’t already.

How to Opt out of Chase’s Binding Arbitration

Towards the top of the email, under the heading, “Summary of changes to your account terms effective 8/11/2019“, the third bullet of my email reads:

A binding arbitration provision is added. YOU CAN REJECT THE BINDING ARBITRATION AGREEMENT. YOU MUST MAIL YOUR REJECTION TO US BY 8/10/2019. PLEASE SEE THE END OF THIS NOTICE FOR INSTRUCTIONS.

I have read that others’ emails state a mailing deadline of August 7. If you have a Chase card and care about opting out, then search for your email and see what your deadline date is.

The letter must state that you reject this agreement to arbitrate. Include your:

• Name
• Account number (or account numbers, if you have multiple Chase cards)
• Address on the account(s)
• Personal signature

Mail the letter to:

P.O. Box 15298

Wilmington, DE 19850-5298.

Write a quick letter yourself or use Military Money Manuel‘s template. I double checked with Chase that just one letter listing all your accounts would suffice, as opposed to separate letters for each account (which I have read in some places online is what was required). They confirmed just one letter listing multiple accounts will work:

Hi, thanks for reaching out with such an excellent question. One letter with the listed account numbers would be sufficient to opt out of arbitration. Please let us know if we can provide any additional support. ^BF

— Chase Support (@ChaseSupport) August 7, 2019

Why You May Want to Opt Out, Retaining Your Right to Class Action

The new provision likely will not affect you personally, at least on a financial level. People don’t typically rake in the big bones from class action lawsuits. The average is $32. But only 9% of people actually get financial relief in arbitration. Take a look at this EPI article’s stats:

• At least 6,800,000 consumers get cash relief in class actions—compared with just 16 consumers who receive cash relief in arbitration, according to available data.
• Consumers recover at least $440,000,000 in class actions, after deducting all attorneys’ fees and court costs—compared with a total of $86,216 in arbitration.

So while all the money leftover from class action lawsuits is split thousands of ways between participants, at least the bank is being held more accountable than they are through individual arbitration.

Will Chase shut down my accounts if I opt out?

I’ve seen a lot of concern from commenters on posts about this subject on other miles and points blogs and on Twitter and Reddit that Chase would shut down their account(s) should they opt out of binding arbitration.

Bloomberg confirmed that this will not happen.

Not that big banks have shining reputations, but I believe them when they say they won’t simply because it would reflect horribly upon them if they did.

Bottom Line

Chase, among other banks, were forced to drop arbitration clauses from their card agreements about ten years ago after a large legal settlement. I’m not a lawyer, but I don’t see bringing it back as a consumer-friendly move.

If you think otherwise I’d like to hear your opinion on the matter. I plan on sending an opt-out letter by my August 10th deadline.

Are you going to opt out?