A suit filed against eight of the nation’s largest credit-card companies alleges that they colluded to require customers to settle disputes through arbitration, reported The Wall Street Journal.

The lawsuit, filed in a New York federal court last month, seeks class-action status on behalf of seven plaintiffs from California, Pennsylvania, New York, Illinois, and New Jersey, wrote the Journal. Defendants include Bank of America Corp., Capital One Financial Corp., J.P. Morgan Chase & Co., Morgan Stanley’s Discovery unit, Citigroup Inc., MBNA Corp., Providian Financial Corp., and the U.K.’s HSBC Holdings Plc.

Reportedly, the lawsuit maintains that the companies “combined, conspired and agreed to implement and/or maintain mandatory arbitration,” which would violate federal antitrust laws, noted the paper. Specifically, the complaint alleges that some of the defendants secretly held at least 20 meetings between 1999 and 2003 to discuss their experiences and share advice on how to keep arbitration agreements with customers out of court.

The plaintiffs have asked the court to void their mandatory arbitration clauses, reported the Journal.

The newspaper observed that mandatory arbitration has also become popular among cable-television companies and brokerage firms that want to prevent disputes from blossoming into costly class-action lawsuits. Critics of mandatory arbitration, added the paper, argue that it unfairly takes away consumers’ right to pursue a class-action complaint or a jury trial over such things as late-payment penalties. The Journal also cited an Ernst & Young that found that consumers won more often than businesses in arbitration.

The financial companies named as defendants have yet to respond in court to the substance of the complaint, noted the Journal.

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