Friday, October 12, 2007

Binding Arbitrations Clauses Cost You Your Rights

Public Citizen released a new report all about how arbitration clauses are being inserted into credit card and other types of contracts. "The Arbitration Trap: How Credit Card Companies Ensnare Consumers," details how our right to a trial by judge or jury is being replaced by a pro-business arbitration process.

I just asked my representatives to support the Arbitration Fairness Act of 2007, which will ban these clauses in most of the contracts we sign.

Go here to take action and learn more about how to protect yourself:

From Public Citizen:
"...The Arbitration Fairness Act of 2007, introduced as S. 1782 by Sen. Russell Feingold (D-Wis.) in the Senate and H.R. 3010 by Rep. Hank Johnson (D-Ga.) in the House, would help consumers by eliminating pre-dispute binding mandatory arbitration (BMA) clauses in consumer and employment contracts.

Binding mandatory arbitration clauses in credit card, employment, and insurance contracts force individuals to forfeit their right to a trial by judge or jury if dangerous products, services or workplaces harm them. BMA does not help ordinary people, but benefits big corporate interests like national banks and insurance companies. They use it as a means to evade accountability for any harm they cause or laws they break - laws meant to protect consumers and employees.

There are several reasons why the Arbitration Fairness Act of 2007 needs to be passed.

First, most individuals have no choice but to accept the arbitration clause. If they want the product, service or job, or even if they are required by law to buy the service, as is the case with auto insurance, consumers are forced into BMA.

Second, the lack of any meaningful independent review of arbitration decisions creates a climate ripe for abuse. The arbitration process is secretive and the courts have little involvement. Companies impose arbitration on consumers to keep their corporate misbehavior hidden from the piercing sunlight of our public civil justice court system.

Third, arbitration companies are beholden to companies that hire them for repeat business, which creates a bias. For example, public data published in Public Citizen’s report "The Arbitration Trap: How Credit Card Companies Ensnare Consumers" show that in the portfolio of one California arbitrator who ruled in 532 cases, 526 were in favor of business - a mere 1.14 percent for the ordinary consumer.

The Arbitration Fairness Act of 2007 would change this terrible anti-consumer landscape. If we are to have any hope of restraining powerful corporate interests from abusing their overwhelming market power to the detriment of individuals, families, workers and whole communities, it must change.

It's time to enact the Arbitration Fairness Act of 2007 and roll back the damage being done to our rights and liberties for the sake of profit."

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