Last night my colleague Christine Hines and I hosted an online conversation about one of the most insidious threats facing consumers: forced arbitration clauses.

If you missed the conversation, check it out below:

Many people never think to read the gobs of fine print in contracts for things like cell phones and credit cards, but companies are increasingly using those types of contracts to restrict our access to the justice system.

Forced arbitration clauses prohibit customers from taking a company to court if the company harms them or rips them off. If you want to pursue a claim you’re forced into a private system called arbitration, where the company picks the arbitrator, and the arbitrator doesn’t have to follow the law. Decisions are binding and typically cannot be appealed.

Sounds more like something from a dystopian novel than real life, but forced arbitration clauses have become ubiquitous in all kinds of everyday consumer terms of service.

Fortunately, the Consumer Financial Protection Bureau (CFPB) can do something about forced arbitration clauses in financial contracts (like credit cards and bank accounts), and the agency is studying the effects of the clauses right now.

When the results of the study are released we need to be ready to push the CFPB to use its authority to ban these anti-consumer clauses from financial contracts.

Join our CFPB taskforce today and we’ll let you know the most effective way to urge the agency to take action as soon as the study comes out.

As soon as the study comes down we need to be ready to vocally advocate for a ban on forced arbitration. You can bet our opponents, Big Banks and the like, will be out in full force, so we’ll need to be as loud as possible to counteract them.

Sign up today, and help us take down this deeply unfair, anti-consumer practice.

Kelly Ngo is the online advocacy organizer for Public Citizen’s Congress Watch division. 

Comments

  • Gee, what we have here is a failure for me to communicate. I have written so many times on the Internet, that the Truth in Lending Act (TILA) of 1968, still in force, does not use the mathematically-true method of expressing an Annual Percentage Rate. Even though the Dodd-Frank Act was seemingly thorough to treat all wounds, it does not address the fact that the original NOMINAL (multiplied) method of determining an APR is still used. It is not the mathematically-true compound APR (CAPR, which is used in the U.K. and Canada and in the USA in the Truth In Savings Act. The Officials in charge have stated that the word “nominal” cannot be use when stating an Annual Percentage Rate. I hold in my hand a letter from Robert Willard Johnson, who responded to a letter I sent in 1974 stating that the compound method is correct, but he helped choose the method and the Nominal (Simple Interest) method was chosen because of the “cost of computing.” What he meant was that compounding was on very few machines in the 1960’s. Also, at that time interest rates were low and payment periods longer. At those conditions the Nominal APR was close to the Compound Now, the CAPR should be used!

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