U.S. Supreme Court

Does Law Provide a Right to Sue over a $257 Credit Card Fee? Justices Mull the Issues


Justice Ruth Bader Ginsburg appeared firmly on the side of consumers when the U.S. Supreme Court considered Tuesday whether a federal law gives consumers the right to sue credit repair companies despite signing contracts requiring arbitration.

Ginsburg “chimed in early and often” to challenge the lawyer for CompuCredit, a credit repair organization accused of charging $257 in hidden fees for its credit cards with a $300 credit limit, the Huffington Post reports. Other justices weren’t as enthusiastic for the consumer position, according to the story.

“Most of the justices were relatively muted—or in Justice Stephen Breyer’s case, entirely mute—as the lawyers before them dutifully made their arguments despite the apparently foregone conclusion that CompuCredit will win,” the Huffington Post says.

The consumers, represented by Scott Nelson of Public Citizen, contend explicit language of the Credit Repair Organizations Act gives them the right to sue. CROA provides: “You have the right to sue a credit repair organization that violates the Credit Repair Organization Act.”

Stanford University law professor Michael McConnell, a former federal appeals judge, argued the law provides consumers with a “cause of action” that is satisfied by arbitration, the Washington Post reports. He cited Supreme Court precedent that says Congress’ preference for arbitration can’t be trumped by other federal laws absent a clear statement ruling out arbitration.

The case is CompuCredit Corp. v. Greenwood.

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