If you have a disagreement with a credit card company, loan company, title loan company, or other financial service provider, filing a lawsuit should be well within your rights. Unfortunately, you may have signed away the right to take your case to court without your knowledge. Many of these companies put forced arbitration clauses in the fine print of your agreement. This means that if you have a disagreement, you may not be able to protect yourself through the court system.
The Consumer Financial Protection Bureau (CFPB), a leading governmental agency on consumers’ financial rights, released the findings of its latest study today. The study found that forced arbitration is unfair and harmful to consumers, and it prevents consumers from recovering losses in class action lawsuits. Signing an arbitration clause gives either party the right to block lawsuits from proceeding in court, and this includes class action litigation.
Forced arbitration clauses are included in a variety of consumer finance contracts. The CFPB examined arbitration data from credit cards, prepaid cards, banks, student loans, payday loans, private loans and mobile wireless contracts. Arbitration clauses were commonly used in the majority of these consumer contracts.
Why Arbitration is Bad for Consumers
Arbitration generally benefits only the companies that use it. These companies force arbitration to avoid the court system. When a consumer signs a loan agreement or cell phone contract, they may not be aware that an arbitration clause is buried in the fine print and gives the lender the power to avoid the court system should a dispute arise. Arbitration clauses limit consumer relief, deprive consumers of certain legal protections available in court, and may not provide a neutral or fair process.
Arbitration takes power away from the consumer and allows companies and predatory lenders to gain the upper hand. It can eliminate valid claims against harmful industry practices and strip consumers of any meaningful way to seek relief when they are harmed.
What You Can Do To Stop Forced Arbitration Today
The attorneys at Cory Watson believe that every consumer has the right to recover if they’ve been wronged. We want to give the power back to you, the consumer, and singing this petition is the first step.