Some Notes on Barclays Card Agreements

[Billy Pilgrim]

Hello, I have an open thread involving PRA suing me for a Barclay’s card here, but I wanted to create a separate thread to bring attention to some nuances in the Barclays credit card agreement.  Specifically, there are relevant parts to the agreement which are outside of the arbitration section and may be missed by some people (myself included).

First of all, the arbitration section has verbiage that states: "Under no circumstances will we seek from you payment or reimbursement of any fees that we incur in connection with arbitration.”  Now while the sounds all warm and funny, it’s important to note that AAA (which is the arbitration forum designated by the agreement) caps consumer fees at $200 anyway, so there may not be a whole lot of intrinsic value to the consumer in the above statement.

Now, in the" default" section of the agreement there is verbiage which states “As permitted by applicable law, you agree to pay all collection expenses actually incurred by us in the collection of amounts you owe under this Agreement (including court or arbitration costs and the fees of any collection agency to which we refer your Account).”  While this may seem to conflict with the verbiage in the arbitration section quote above, it’s important to note that the sentence begins “as permitted by applicable law”, which I believe implies that the debtor is on the hook for arbitration costs which are not explicitly fees, since the contract itself would be the applicable law.  This would imply the arbitrator’s compensation is owed to the creditor.

AAA rules state that “Arbitrator compensation is not subject to reallocation by the arbitrator(s) except as may be required by applicable law or upon the arbitrator’s determination that a claim or counterclaim was filed for purposes of harassment or is patently frivolous.”  This appears to pave the way for an arbitrator to reallocate their compensation based on the verbiage in the default section of the agreement, even in the absence or frivolous claims or harassment.

So if you get sued by Barclays or a JDB, and you elect and are granted arbitration, you may be on the hook for at least $1500 ($2500 if there is a telephonic or in-person hearing) despite no wrongdoing of your own.

The final point I would like to bring up is in the "governing law" section, which states “THIS AGREEMENT AND YOUR ACCOUNT WILL BE GOVERNED BY THE LAWS OF THE STATE OF DELAWARE AND, AS APPLICABLE, FEDERAL LAW.”  Delaware Law has a 3-year statute of limitations for credit card debt, and while this is something that Barclays isn’t likely to overlook, it can be easily missed by a JDB.  So if you are sued by a JDB for a Barclays card debt past the 3 year window, a SOL defense in court might be your best option.  And if you have already commenced arbitration, this is something worth mentioning to the arbitrator as they have, to the best of my knowledge, the option of considering a SOL defense (and also the option of disregarding them).

Hopefully this is helpful to anyone being sued/or in arbitration for a Barclays card debt. The verbiage quoted is found in both the 2014 and 2020 Barclays card agreements. Thanks for reading and any inaccuracies are welcome to be corrected.