Tell HN: JPMorgan Chase forcing arbitration agreement to log in
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Not only is Chase forcing me to opt into a 125 page agreement [0] in order to log in to my account—say, to pay my bill or check my balance—but that agreement has a new arbitration clause. The arbitration clause says you can opt out within 60 days but gives no instructions for how to do so. Not even an email address to contact.
I would love to log into my account tonight but won't until I know I can opt out of arbitration.
This upsets me, maybe more than it should, and I'm thinking of dropping Chase. Anyone else?
[0]: https://static.chasecdn.com/content/dam/legal-agreements/lib...
There's a weird legal issue that I don't get why it is widely accepted. Why is an average person expected to understand legalize? There is absolutely no reason to believe the average person a) reads that whole thing (clear dark pattern) and b) understands the whole thing. Even intelligent people! Because it is lawyer language written for lawyers. It is like expecting the average person (not on HN) to be able to tell you what metadata is or how machine learning models work (okay maybe HN too ;). How do we not see these as patterns of deciept and taking advantage of people? We live in a highly specialized world and that has been great, but we can't reasonable expect people to comprehend these decisions. It comes down to some combination of trust, naivety, and arm twisting in the end, and this shouldn't be seen as okay.
Fwiw, I agree it’s scummy and the average person is likely to rollover because they think they already agreed to ____.
This specific situation is of course in reference to the U.S so the following pertains https://ironcladapp.com/journal/contracts/terms-and-conditio... and actually I'm not sure if this fulfills the conditions of a contract?
>According to contract law, in order for a contract to be valid, there must be an offer, consideration, and acceptance. Being able to prove your customer accepted your terms (and therefore entered a contract with you) will determine whether or not your Terms and Conditions are enforceable.
In this case someone is accessing their account, not signing up for an account, not purchasing anything - so not sure if there is actually an offer or consideration the way there would be if a user purchased a pair of shoes.
I don't think that argument is going to hold up very well.
The system is working as intended.
But, the average person is scared, think it's official and meaningful and feels very impressed by all this complicated-sounding gibberish. That's why they don't pursue litigation, thinking they indeed forfeited the right to.
But in fact any judge would toss that aside and do as if it never existed, because contracts have to be reasonable in the first place, and consent must be established clearly, not "I can't pay my kid's meal if I refused JP Morgan's conditions".
Imagine a tiny line saying "I give all my panties to the CEO upon my death", you think clicking "I agree" on a website will... actually make anyone enforce this ?
This is much more okay than the alternative, in other words.
For example, if I buried a clause stating that you transfer all your assets to me somewhere deep inside my website's Terms of Use, there is no way in hell I will be able to enforce that. It would be considered an "unconscionable contract", and it would be voided.
An on-topic example would be Uber v. Heller, where an arbitration clause in the contract was ruled unconscionable, and as a result the plaintiff was allowed to file a class action lawsuit against Uber.
Similarly, clauses can be deemed unconscionable because they are an "unfair surprise". An example is Williams v. Walker-Thomas Furniture Co, where the fact that Williams did not understand the contract was considered to be a major factor for the contract being unenforceable.
So yeah, when it comes to a contract between an individual and a large business, "I didn't read it and assumed it to just be the standard legalese stuff" is in fact a valid defense.
Interesting, and not supported by the case law.
In general, many more services ought to be treated as common carrier services than actually are.
It sounds like you want a credit union.
How about people realize services cost money and pay their own way?
Keep in mind that banks receive enormous support from the government and society. There’s the FDIC, Fannie Mae, Freddy Mac, the Fed (and its discount window, FedWire, etc), the fact that banks are effectively permitted to create M2 money, and more. And the governments (federal and state) essentially require a bank account to do many useful things, including paying taxes. The government regulates the banks quite firmly in exchange, but the regulation is missing the bits where the banks may not refuse service or abuse their customers.
Both of these we've seen the government hold up frequently in the past. We monopoly bust as well as bust when companies become too big. For some reason people think precise monopolies are different from effective monopolies. Contract law itself doesn't allow you to put illegal things into the contract. Anarchocapitalism doesn't work, despite libertarian beliefs because power is not linearly proportional, natural monopolies exist, and collusion exists. Two-three big companies that control 70% of a market can all gain if they decide to include clauses where they acquire all your assets immediately. Insurance companies can maximize profits by kicking you out as soon as you get sick and requiring that you have to have one. The solution spaces are large and even when competition exists the nash equilibrium isn't always what's best for consumers. Nuance is requires because multiple solutions exist, not just the one we want to exist.
Of the 11 sectors making up the S&P 500, over the last 15 years, finance is one of the least profitable. Banks are not very profitable compared to other sectors of the economy. [1]
The reason is there are ~5000 banks in the US, and a huge number you can choose from. If a few banks were simply charging tons more than it actually costs to run a bank, another of the 5000 would lower costs and attract more customers from the costly banks. The largest bank by deposits, JP Morgan Chase, holds < 8% of deposits held by banks. There is no monopoly, or duopoly, or anything approaching market dominance. [2]
If you're sure they making "an absolute crapload" you should invest in them. But since in reality they are not very good investments, you should rethink your beliefs. Your beliefs simply are not true, as demonstrated by market evidence.
>Keep in mind that banks receive enormous support from the government and society.
Keep in mind that society and government receives enormous support from banking. That's why they have trillions in assets - because they provide value to those using banks. When people, or govt, chooses to use a bank, both sides gain (consumer and producer surplus in economics). So the amount of business some entity obtains is reasonably proportional to the amount of utility they provide to customers. This is simple econ.
>There’s the FDIC
Paid for by banks....
>Fannie Mae, Freddy Mac
Paid for by, you guessed it, banks.... Where do you think the loans the FMs holds originate?
>the Fed (and its discount window, FedWire, etc)
Designed to help banking remain stable from bank runs, from, guess what, panics of people. It's such a good system for stability compared to previous times that the structure has been adopted by all 200+ countries on the planet. Not a single one has decided not to use this structure.
>the fact that banks are effectively permitted to create M2 money
A common misconception - it is not "free" money. It is backed by an exactly equal debt, netting zero in assets for the bank. To cover the risk that the borrower defaults, the bank charges interest. If the bank makes enough bad loans, the bank, not you, lose money.
The alternative is no loans, for college, cars, houses, payroll, etc.
>the governments (federal and state) essentially require a bank
To fund their functioning. How do you think the govt runs a deficit? Banks lend them money. Without the markets made by the banks to provide liquidity to govt, at the municipal, state, and federal level, society would be tremendously worse off.
Go spend time learning how the bond markets work, how treasuries work, detailed differences between the Fed and Treasury, and look at historical events and how they were paid for.
>the regulation is missing the bits where the banks may not refuse service or abuse their customers
Then you have not read any laws, ignore the many agencies that precisely do this, or the long history of punishments.
[1] https://novelinvestor.com/sector-performance/
[2] https://www.statista.com/statistics/727546/market-share-of-l...
Yes. I'm happy to do so. Can't the gov even make money through this? Seems like they could buy bonds with that money. But I'm no economist
> How about people realize services cost money and pay their own way?
That's not the calculus. It's part of it but far (FAR) from the whole calculus. There's also the cost of not providing the services. Again, there's more to the calculus, but this other side always needs to be considered and almost never is because we weigh money spent far more then rewards not received. But the ability to do this is exactly what makes us human and distinct from many animals
If the contract is so long that initialing every clause/paragraph is a burden, maybe that's a sign that it's too damn long.
you aren't actually entitled to online banking services from Chase
HOWTOs from official US gov't websites:
https://ask.fdic.gov/fdicinformationandsupportcenter/s/artic...
I think you mean in arbitration.
Yes it does, under: Can I (customer) cancel or opt out of this agreement to arbitrate?
"If you want to opt out, go to the Legal Agreements and Disclosures section of your chase.com or jpmorganonline.com profile or on Chase Mobile or JP Morgan Mobile."
On the lower left side bar of the desktop/full site in small print is the legal agreements and disclosures link. That page has the link for the Arbitration opt-out
Oh and let's be clear - Chase is an absolute trash bank. I have no idea why anyone would waste time with their retail deposit or savings products.
However Chase does offer some of the best travel Credit Card products in the US, the only one directly competing with them is Amex and they are not a great worldwide traveling card, Capitol One is close but not quite. Chases' customer service is a mixed bag, but it's on par or better than most of the competition (say, Citi, ugh).
And they have a zero-fee foreign currency transactions that still give you cashback.
It's really good (from my perspective). The only downside is they require an US phone number to use the products (on top of SSN)
It is the other travel protection benefits where Chase has an edge with better insurance. Additionally Chase has a lineup of travel reward transfer partners that are more compelling for USians. The redemption rate can be up to 50% higher. It also rewards better for heavy restaurant goers. The Venture X has cell phone insurance, but I've not found it worth it these days given the large differential in Bank account Auto Pay incentives with all the major carriers, and it does not cover prepay.
The Capital One Venture offerings are not terrible, it is a cheaper card.
There's also no reason why you need or should do deposit banking at the same place you use for credit cards. The incentives for doing so have never been compelling.
I regularly get offers from them in the mail, free money if I open an account. I imagine some people are going for it then just stay.
how about putting a simple "disagree" button?
https://www.fidelity.com/why-fidelity/safeguarding-your-acco...
Same thing with Schwab. Both also have outstanding customer service.
However the best bank I ever used was I believe a smaller bank, 5/3rd.
5/3rd had the best service a non bloated mobile app and good rates on loans/mortgages. Moved out of the country so I closed the account but I do miss that bank
I had to get on the phone with tech support 4 times before things started working weeks later. First time, they sent be back to the site, only to make it worse. Second time, they gave me some weird recovery code, which I couldn't put in the site properly. Third time, they told me to wait 24 hours because there was nothing I could do until my threat score decreased but they weren't willing to assist or elaborate. It wasn't 24 hours, it was more. Eventually when I did get in, actually using the website once logged in, in certain ways, re-triggered me getting blocked.
So, I vastly overpay my mortgage because I want to be done with them as fast as possible. Terrible experience.
I generally log in at home. Didn’t check from work often. Maybe once or twice every 3-4 months.
I keep gmail logged in, I had a hunch they look for that cookie/tracker
That being said, we had a lot of professionalism/ethical concerns with our most recent loan originator/agent with 5/3. This person seems to have intentionally misrepresented my wife and I's profession on the internal loan application to qualify us for a better rate. This was only caught well into the process when underwriting asked for proof of said profession (which of course I couldn't provide since I never claimed to be of said profession). We ended up having to restart the entire application process 10 days out from closing.
It seems to have been a one-off situation, as this person's manager ended up taking over and was _fantastic_. We pulled everything together in some unbelievably short amount of time.
Our prior loan was smooth as heck with them and they've serviced the loan the entire duration.
If they have checks that caught the misrepresentation in your case, it seems unlikely they condone it broadly. Sounds like the agent was either ignorant or foolish to have even tried it.
Even worse was my wife and I were sensing something was off and asked questions like "You know he doesn't work that profession. Are we still going to be eligible for this loan?"
local credit union
It's certainly something that works occasionally
I'm really hoping it blows up in some company's face where there are a lot of individuals with claims and it goes viral. Would tickle me funny if a Fortune 500 company got bankrupted by some zoomer on tiktok doing a stupid dance while telling people how to file for arbitration. AFAIK it is actually FAR FAR more expensive than a class action lawsuit if a non-trivial number of people actually file for arbitration.
IIRC I filled out 1 online form and had previously sent 1 copy-paste demand letter.
Otherwise, consumer arbitration is a shitshow, a kangaroo court, a mockery of the idea of justice. Arbitrators’ livelihoods depend on the repeat business of - you’ll never guess - corporate defendants. Their award stats bear this out.
Related guidance for Chase arbitration policy opt out:
https://www.creditkarma.com/insights/i/chase-binding-arbitra...
Some highlights - Employee win rates in mandatory arbitration are much lower than in either federal court or state court, with employees in mandatory arbitration winning only just about a fifth of the time (21.4 percent), which is 59 percent as often as in the federal courts and only 38 percent as often as in state courts
- Differences in damages awarded are even greater, with the median or typical award in mandatory arbitration being only 21 percent of the median award in the federal courts and 43 percent of the median award in the state courts
- average outcome in mandatory arbitration is only 16 percent of that in the federal courts and 7 percent of that in state courts
- The mandatory arbitration–litigation gap in outcomes has a direct effect on the ability of individual workers to recover compensation for the injuries they have suffered.
- ""The fact that it is not worth the expense involved in proving a statutory remedy does not constitute the elimination of the right to pursue that remedy.""
While this relates to employee vs employer arbitration - similar effects apply to consumer arbitration.
mandatory arbitration and class-action waivers are two of the most pernicious terms allowed in modern contracts of adhesion and must be fixed.
More recently, the Supreme Court held that a district court had to stay proceedings just because an appellate court was considering whether the arbitration clause was valid. So a hundred years later, it's being enforced to its fullest extent.
The FCC has regulations against negative options, i.e., making a contract if you don't do something, but online companies seem to get away with changing terms and prices, and requiring you to cancel your subscription or reject new terms.
To me it seems like a violation of contract to make a contract and then change the terms -- after the other party relies on the contract. But without any real damages, there's no money for attorneys to go up against the corporate attorneys, so the law continues to evolve in their favor.
Law firms have caught on and have figured out how to spam claims at corporations.
In arbitration, there is no option to combine cases into a class action suit.
From a consumer perspective it really is a no-win situation. The agreements are specifically designed to make the process as one sided as possible.
Link to the language? I don't believe they can dismiss an unrelated claim on the basis of having argued another.
I misremembered; it’s 16, not 15
Each side picks eight cases while the others are held. Once those sixteen are decided the rest are resolved, collectively, taking those sixteen cases’ resolutions into account. At each step, you can dispute the characterisation, and Zoom pays the arbitration fees.
Nobody’s case is ignored. It’s to avoid this [1].
[1] https://www.reuters.com/legal/litigation/uber-loses-appeal-b...
In literally every case other than potential criminal activity directed at you or class actions, arbitration is better for non-1% consumers. In courts, a wealthy adversary can starve you—delay and run in circles with the object of running up legal time. They can't do that in arbitration.
This is obviously a shit way to present anything to a customer. But mindlessly opting out of arbitration will reduce the average American's ability to fight large companies.
It limits downside. So if you’re someone who could and would sue, it constrains you. If that’s you, opt out. For anyone who wouldn’t (or can’t afford to), it’s a net gain.
Most people don’t escalate disputes to even their regulators, so from the company’s perspective they’re irrelevant. If consumer behaviour changed to actually engaging arbitration, companies would be less enthusiastic about it.
TL; DR Arbitration is a bet by companies on the masses’ complacency in exchange for dampening short-tail legal risk. If you’re not in that tail, if you’re among most Americans, you can exploit this calculation.
Wrong and untrue. Arbitration fees are typically paid for by the firm, yes, but this is a plus. The arbitrator is randomly selected or a consensus choice in every system I know of.
Win rates for consumers vary by forum, from 60% with FINRA [1] to 22% with AAA [2]. For context, it’s about a third in court [3] and lower still (consumer v. corporate defendant) in small claims. (If you adjust for non-wealthy claimants, the skew in favour of arbitration leaps.)
[1] https://www.finra.org/arbitration-mediation/dispute-resoluti...
[2] https://www.adrtimes.com/chances-of-winning-arbitration/
[3] https://instituteforlegalreform.com/press-release/new-study-....
[1] https://www.nytimes.com/2021/07/22/business/amazon-arbitrati...
I don't like arbitration agreements generally, and I don't think they should be allowed be used so universally, but this doesn't seem especially obnoxious. It is just the terms for using their "digital services," and so it should not impact the terms you agreed to when you signed up for your account, which probably already have a separate arbitration agreement.
Opting out of arbitration also reduces your avenues for legal remedy by removing your option to force arbitration.
Chase knows your financial condition. Its lawyers can ascertain with terrific precision the odds of you, on one hand, accepting their Chevy's gift card and then forgetting to even call your elected, or, on the other hand, assembling a legal team.
If you can afford the hundreds of thousands to millions of dollars taking a case against a well-heeled adversary costs (together with a proper legal PR campaign), yes. If you can't, no. Arbitration massively levels the field between adversaries of different wealth.
You also can not appeal the decision, nor are you normally able to have any say in who the arbitrator will be (it's typically chase that chooses who decides the case, how convenient for chase!)
This is immaterial to 90% of consumer disputes. (You can always still report to a regulator, which covers 90% of the remainder.)
> lot of the reason coorperations [sic] don't do questionable things is because of the PR backlash
Citation needed.
> you have to choose whether you will take them to the arbitrator or raise awareness in public
Right. You maintain the choice to do what, again, 99% of disputes don’t do. Or to bind a wealthier counterparty to a process they typically pay for and in which they can’t deploy starvation tactics.
> it's typically chase that chooses who decides the case
Which arbitration service lets either party chose the arbitrator?
Genuinely, ask your lawyer for advice. Most people knee-jerkedly rejecting arbitration haven’t asked a lawyer, probably don’t have one in the first place, and are clearly of de minimus legal or PR threat to a firm like Chase. In the event of a serious dispute, corporate counsel will note that to decision makers.
What if 10% of the time, we just said 'we won't investigate companies' when they break the rules, would that be good for you? What if those 10% of the time were typically the most egregious cases?
> Citation needed.
Citation: The existence of PR teams????
> Which arbitration service lets either party chose the arbitrator?
Who chooses the service (hint: it's almost always the company)? What are the rules for what constitutes an 'arbitration service'?
If you had any 'choice' in the matter, you'd only engage in an arbitration agreement if it benefits both sides. The way corporations use the law is to benefit them at your expense. I don't want an arb agreement, but they do, so I have to take it or suddenly I don't have easy access to my bank anymore, if I have access at all.
> Genuinely, ask your lawyer for advice. Most people knee-jerkedly rejecting arbitration haven’t asked a lawyer, probably don’t have one in the first place, and are clearly of de minimus legal or PR threat to a firm like Chase. In the event of a serious dispute, corporate counsel will note that to decision makers.
I have talked to lawyers about this, and most of them agree with all of my criticisms.
We're talking about consumer disputes, not crimes. If there's a crime, again, you can loop in a regulator and law enforcement.
> What if those 10% of the time were typically the most egregious cases?
Again, nothing prevents you from making a public stink before submitting to arbitration. You can have your cake and eat it, too.
Also, false economy. The trade-off isn't between 100% and 90%. It's between 90% having a chance, versus something like 5% of the population having the ability to pursue minor civil claims through the courts.
> Who chooses the service (hint: it's almost always the company)? What are the rules for what constitutes an 'arbitration service'?
Courts have defined what constitutes a genuine arbitration service. Again, there is case law and there are data around this.
> have talked to lawyers about this, and most of them agree with all of my criticisms
Sure, I do too. It's theoretically flawed. But so are our courts.
For the average American, what's their advice? (In cases where I think I may have major claims, e.g. with insurers, I opt out of arbitration. But for checking accounts? Arbitration, all the way.)
- https://www.visualcapitalist.com/terms-of-service-visualizin...
- https://www.zzzuckerberg.com/
- https://www.theguardian.com/technology/2017/mar/03/terms-of-... ... and yet people read terms of service