by Jeff Sovern
Gene DeSantis served 12 years as Counsel to the Assembly Consumer Protection Committee and also taught Consumer Law for 15 years at Syracuse University and 5 years at Albany Law school. During his time as Counsel, he drafted the NYS law prohibiting the use of mandatory arbitration clauses in consumer contracts, which is preempted by the Federal Arbitration Act, as interpreted by the Supreme Court. He writes:
I took out a credit card from TD Bank to give to my son while he attended college . . . . Last December, he had charges of about $71. No problem – I always pay the bill in full, and I incur no finance charges. It works.
But after Christmas I [was away from home for some months.] I have my mail forwarded, I get all my bills, and I pay them promptly. It all works just fine.
Except TD Bank does not allow the US Postal Service to forward credit card bills. So, I never got the bill for the two gas purchases my son had made, and several months passed. In March or April I was stunned to get a debt collection call informing me that my TD Bank credit card account was more than 90 days delinquent, and I owed not only the $71 in purchases, but several months of late payment fees as well. The penalties were more than the purchase!
I told TD Bank I could not be delinquent, I had never gotten a bill. They informed me that the bills had been sent to my home in East Greenbush but were undeliverable. I explained that all my bills are forwarded (I get my Chase bills no problem), and was stunned to hear that TD Bank does not allow their credit card bills to be forwarded “for my protection”.
I paid the amount of the purchases immediately but I refused to pay late fees or interest. I have spoken three times or more to TD Bank “customer service representatives” and to “supervisors” but all to no avail. My bill has now ballooned to $136.71 (remember, the purchases of $71 I have paid in full) and it grows each month. I get threatening calls and letters, telling me that my delinquency will be reported to credit bureaus and my credit will be impaired. I tried calling TD Bank one last time but again they were unwilling to waive the penalty fees caused by their refusal to allow my bill to be forwarded.
Because of the mandatory arbitration clause, I cannot sue TD Bank. I feel helpless, despite serving 12 years as Counsel to the Assembly Consumer Protection Committee and teaching Consumer Law for 15 years at Syracuse University and 5 years at Albany Law school. In an incredible irony, I was the counsel who drafted the NYS law prohibiting the use of mandatory arbitration clauses in consumer contracts – a law that is useless thanks to the decisions of Federal courts that have preempted it.
So yesterday I found myself filing a complaint with the CFPB. I asked them not only to help me, but to investigate and intercede to protect the countless number of consumers who have been hit with late fees, interest and penalties by banks that don’t allow their bills to be forwarded, and cause their customers to be late.
Here is Gene's summary: "It is incredible they could cause you to not get your bill and then turn around and penalize you for being late paying the bill they would not allow you to receive."
And my comment: I wonder how many others have had similar problems. If enough have, this would appear to be appropriate for a class action–but the arbitration clause prevents that. Sigh.