Consumer Agency Looking Into Mandatory Arbitration
- Source: New York Times
- April 25, 2012
You may not know it, but the fine print in the rules governing use of your credit card and your checking account probably limits your right to sue in court if you have a dispute with the company providing the service. The Consumer Financial Protection Bureau said Tuesday that it is seeking information about that language in agreements for financial products and services.
Mandatory arbitration clauses, which require customers to air grievances in a private hearing instead of a public courtroom, have become widespread in all sorts of consumer contracts, said Ira Rheingold, executive director and general counsel of the National Association of Consumer Advocates. The association, which is part of a coalition of consumer groups opposed to forced arbitration, argues that alternative dispute resolution formats like arbitration can be useful — but only if they are optional.
The Safe Checking in the Electronic Age project, a program of the Pew Charitable Trusts, last year looked at more than 250 accounts offered by 10 large banks and found that the majority of them contained some sort of forced arbitration requirement. Some also included language that would require customers to pay the bank’s costs and expenses, even if the bank lost, said Susan Weinstock, the director of the electronic age project.
Read the full article at nytimes.com.