A California appellate court today invalidated a provision in Discover's cardholder agreement which prohibits class actions. The court found that the ban on filing class action suits which is part of the arbitration clause added to cardholder agreements in 1999 was unconscionable. The court reasoned that consumers had no choice but to accept the provision or close their accounts. Since few cardholders would think it worthwhile to bring individual actions to recover for small overcharges, Discover would be virtually immune from liability for shady and deceptive practices unless class actions are allowed. In the case reviewed, the plaintiff had been forced to arbitrate his claim that Discover improperly assessed a $29 late fee. Consumers 1 Discover 0 It pays to discover. Szetela v. Discover Bank <http://www.courtinfo.ca.gov/opinions/>
