Can Chase Close Your Account if You Reject Arbitration?

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I read a Miles to Memories article about a person who claims that his Chase account was closed because he sent a letter to Chase opting out of the arbitration agreement. When he said he would agree to the arbitration, Chase responded by saying that the account could not be reopened and that it was closed due to rejecting the arbitration agreement.

I have many follow-up questions regarding this claim. First, did Chase send a letter to the customer with the reason for closure after he opted out, or did he only learn of it when he called Chase? Second, is the written reason for closure, “You opted out of arbitration.” Or is he assuming that this is why the account was closed. If it is the former, that presents an interesting legal case that is worth pursuing.

I would argue that it is illusory to give customers the option of opting out of arbitration when there is a threat of shutdown if that option is not exercised. That is not acting in good faith. That is not a legitimate reason for closing the account. The next question is how would the claim be filed? I would have the client opt-in (for the second time) to arbitration. It would be interesting to see if Chase would agree to arbitration at this juncture (see Chase Mandatory Arbitration: Stop Complaining, Start Fighting).

An arbitrator may interpret the law to say that any reason given, even a bad one like this, is good enough not to run afoul of the Equal Credit Opportunity Act. There’s only one way to find out.

Here is the reddit thread.

Contact Bachuwa Law if you have had your credit cards shut down.

 

3 COMMENTS

  1. Meow! A complicated one for sure. So………….. Why wouldn’t you pursue this claim in regular court? Presumably OP successfully opted out of the arbitration clause so it would just be a regular ECOA claim, right? Prima Paint would not apply. And you could always appeal/set a precedent, and actually share the ruling (if any) with the public!

  2. Seems a little much. I mean why? Why to go to such lengths over credit card points and /or terms of a credit card? The rules are always laid out. If you don’t like then cancel the card. Or don’t apply. Unless of course The rule stated you have the right to opt out. But judging from the article I don’t think that language was there.

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