Mandatory Arbitration is Bad for Consumers

Dan Frith

Contributor

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It seems that every type of consumer transaction these days is governed by a mandatory arbitration provision. Arbitration language in these contracts prevents the consumer from exercising their Constitutional rights to bring a civil claim if their stock broker depletes their retirement account, or the nursing home fails to properly care for their mother or father, or they have a dispute with the issuer of their credit card or holder of their mortgage. The list is without limit!

Corporate America is taking away your rights and I hope you are not going to let them! You may ask...what can I do? Here is your answer. Support the Arbitration Fairness Act of 2007 which would ban pre-dispute mandatory binding arbitration clauses in consumer and employment contracts. This unfair practice stacks the deck against average Americans trying to hold powerful interests accountable when they have been hurt through no fault of their own. For example, you admit your mother to the local nursing home and, unnoticed by you, on the 5 page of the admission agreement is a provision which requires you to arbitrate your claim when the facility fails to turn your mother and she develops horrible bed sores, contracts and infection, and dies. The problem with arbitration in this instance is that you have no rights of discovery and may never be able to "prove" your case! Doesn't sound fair to me!

I am not saying that no dispute should be resolved by arbitration. What I am saying is that enforcing pre-dispute arbitration clauses puts the average individual at a disadvantage. If both sides desire, let them choose to arbitrate after the dispute arises so both sides can be treated fairly. If you agree, let your Congressional representative know and ask him/her to vote in favor of the Arbitration Fairness Act of 2007.