By Nicole Arbabzadeh
There are matters that complement the core ideology of all political parties so well that lawmakers across the political spectrum should be working hand-in-hand to achieve the policies. The Arbitration Fairness Act and the Court Legal Access and Student Support (CLASS) Act, which would restore public’s rights to hold wrongdoing corporations accountable in court, are examples of exactly the kind of legislation that should transcend the partisan divide. And yet, partisanship has been a continuous roadblock to their implementation.
So let’s start by reviewing forced arbitration clauses and their devastating consequences for the constituents of all party affiliations. If you’re asking yourself, “What’s forced arbitration?” you’re certainly not alone. According to a recent study conducted by the Consumer Financial Protection Bureau (CFPB), three-quarters of respondents who understood the meaning of forced arbitration did not know whether their credit card contract contained a forced arbitration clause and a mere 7 percent of respondents whose credit card agreements did contain forced arbitration clauses correctly understood that they could not sue in court. These are startling findings considering that the CFPB’s study also found that the vast majority of prepaid card companies, private student loan lenders, and cell phone providers, and the list goes on, include a forced arbitration clause in their terms. These clauses block consumers’ access to public court and force harmed consumers into inherently biased and secretive arbitration proceedings as a condition for obtaining services.
And financial services consumers aren’t the only targeted group – most ordinary Americans are affected by arbitration clauses, as they are often forced upon employees, small businesses, nursing home residents, and college students, to name just a few.
Now, you may be asking, can arbitration clauses really be that bad? Well, forced arbitration:
1. Robs Ordinary Americans of their Hard-Earned Cash