Forced Arbitration: Is the end in sight?
We’ve been excited about President Obama’s proposal to create a Consumer Financial Protection Agency since he released his plan last month. One reason for our enthusiasm has not received as much attention as it deserves: the new agency could bring about the end of forced arbitration!
Forced arbitration clauses are routinely hidden in many types of consumer contracts; credit card, cell phone, and employment contracts all have these provisions. Forced arbitration strips consumers of their right to sue companies in court, and requires them to settle their disputes through arbitration instead – using arbitrators chosen by the companies. This biased and unregulated form of judgment lacks the protections normally granted to consumers, and causes all kinds of problems.
Recent posts on the Wall Street Journal’s Law Blog and on Public Citizen’s Consumer Law & Policy blog highlight how the administration’s legislative proposal for the CFPA authorizes, and even encourages, the new agency to prohibit forced arbitration in consumer contracts.
AFFIL has helped shine the spotlight on the need for arbitration fairness in the past, but this seems to be the most promising advance in recent history. Onward to justice!
(Photo: Joe Gratz)