You probably think that if your consumer rights are violated by a bank, credit card company, or other corporation, you will have your day in court. However, what few consumers know is that many consumer contracts (like your loan, bank deposit, or credit card agreements) contain forced arbitration provisions.
Arbitration is a process whereby a supposedly neutral third party listens to both sides of a dispute after very limited disclosure of facts and documents and issues a decision. These clauses waive your right to seek relief in the courts in almost all circumstances. This is important as the Consumer Financial Protection Bureau (CFPB), which is an independent federal government body entrusted with enforcing many of the country’s consumer laws, has noted that consumers fare far better before a judge or jury than they do when forced to arbitrate their claims.
Forced arbitration provisions are usually difficult to read and hidden among pages and pages of small print. Their biggest impact is that they make class action litigation impossible. Class actions are cases brought by a group of people who can team up together to take on an unlawful practice by a company. An individual’s remedy can be small by itself. So the ability to file class actions and add a number of people’s damages together can force corporations to remedy the issue and make the consumers whole. Even the threat of class action can cause a corporation to change their practices and settle a claim.
The CFPB has recognized the threat of forced arbitration provisions and acted accordingly. It has adopted a rule prohibiting companies from using them to prohibit class actions. The rule also require these companies to include certain language in the forced arbitration provision and submit certain records related to any arbitration to the CFPB which can then monitor the issue and decide if it needs to take further action.
While forced arbitration provisions have been dealt a large blow, the issue is still not fully resolved. It is unclear what action the current administration and Congress will be taking with respect to the CFPB and this latest rule. Moreover, arbitration provisions will still be enforceable in certain circumstances.
Enright Law is able to review your relevant agreements in connection with a consumer rights issue you are having and determine what rights you have to seek relief. An effective and experienced consumer rights attorney like Enright Law will be able to maximize your chance of getting your issue before a judge or jury instead of an arbitrator and using changes to the law to your advantage. Contact us about your consumer rights issue.