The Arbitration Trap:
How Binding Mandatory Arbitration Ensnares Consumers
Most Americans would be surprised to learn that they’ve been stripped of the right to sue the providers of their cell phones, credit cards, bank accounts, brokerage accounts, or auto loans – not to mention their employers and the nursing homes that house their loved ones – even if the companies commit serious offenses like fraud, discrimination, or outright theft. Companies are using something called "binding mandatory arbitration" wherever they can to guarantee that they won’t be held accountable in a public court.
Despite its complicated name, binding mandatory arbitration is a simple issue. By burying binding mandatory arbitration clauses in the fine print of credit card, cable service, insurance or employment contracts, companies rob consumers of the ability to take these businesses to court and hold them accountable for their wrongdoing.
Instead of court, consumers are stuck with a secretive and unfair arbitration process – where the business chooses the “judge,” where appeals to a real court are severely limited, and where consumers often pay far higher costs than they would in court.
Businesses should not be able to use the fine print of contracts to immunize themselves from accountability and strip consumers and employees of their rights.
Right now, Congress is considering several bills to limit or even outlaw this practice. Take action and learn how to protect yourself from the arbitration trap.