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BUSINESS
Chase drops arbitration from card contracts
BOSTON -- JPMorgan Chase & Co. said Friday it is dropping a clause from its credit card contracts that required disputes with customers to be handled through binding arbitration, a move that could lead to consumers filing class-action and other lawsuits.
A spokesman for the New York-based bank's Chase Card Services unit confirmed the change after a law firm that sued JPMorgan Chase and other banks over arbitration clauses announced a tentative settlement with JPMorgan Chase.
Chase decided to stop sending credit-card disputes to arbitration in July, and now is removing the arbitration clause, spokesman Paul Hartwick said. Banks say arbitration is less costly for everyone than lawsuits. But consumer groups have criticized the practice as tilted in favor of banks.
