Check out this report on ABC News about the unfairness of the private arbitration system forced on consumers by credit card companies and other businesses. I’ve posted about mandatory binding arbitration but this report has an unbelievable example of how stacked the system is against consumers. These binding arbitration clauses are included in the fine print of agreements for credit cards, cell phones, financial services, gym memberships and much more. By forcing consumers to accept arbitration, companies take away a consumer’s right to have grievances heard by a judge or jury. Instead, cases go before a private arbitrator who is hired by the business and who almost always rules against the consumer.
There are several bills before Congress that address arbitration, including the Arbitration Fairness Act (S. 1782 / H.R. 3010), sponsored by Sen. Russell Feingold (D-Wis.) in the Senate and by Rep. Hank Johnson (D-Ga.) in the House. This bill would help consumers by eliminating pre-dispute binding mandatory arbitration clauses in consumer and employment contracts. You can take action by writing your members of Congress and urging them to support the bills.
Also, check out TortDeform, Caveat Emptor and the Watchdog Blog for some great coverage on the arbitration issue.
[…] consumer contracts, for everything from credit cards and stock trading accounts to gym memberships. You usually don’t know that you’ve signed away your rights to take these companies to court over a dispute until it’s too […]