Consumer Group Seeks End To Forced Arbitration
4/28/2009
Source: ConsumerAffairs.com

A coalition of consumer groups is pressing Congress to pass legislation giving consumers a day in court, rather than forcing them to arbitrate disputes with car dealers, cell phone providers and other companies.

The Fair Arbitration Now Coalition’s stated goal is to pass the Arbitration Fairness Act, introduced in the House as H.R. 1020.

Participants represent consumers, employees, homeowners, franchise holders and more. They range from Public Citizen, the National Association of Consumer Advocates, the National Employment Lawyers Association and the American Association of Justice to the National Consumer Voice for Long-Term Care, Home Owners for Better Building and the Leadership Conference on Civil Rights.

The creation of the Fair Arbitration Now Coalition comes as the business-versus-citizen battle heats up on Capitol Hill. Many industry groups are actively lobbying lawmakers, pressing them to allow businesses to continue what the consumer groups say is a predatory practice.

So-called “forced arbitration” clauses are hidden in the fine print of employment, cell phone, credit card, retirement account, home building, nursing home and assisted living contracts, to name a few.

Just by taking a job or buying a product or service, individuals are required to give up their right to go to court if they believe they are harmed by a company.

The coalition maintains the private system of forced arbitration benefits companies and harms consumers and employees, and as a result more and more industries are using the tactic of forced arbitration to evade accountability.

“The Arbitration Fairness Act does not seek to eliminate arbitration and other forms of alternative dispute resolution agreed to voluntarily after a dispute arises,” the groups wrote in a letter to lawmakers. “Its sole aim is to end the unscrupulous business practice of forcing consumers and employees into biased arbitrations by binding them long before any disputes arise.”

The coalition also supports the Fairness in Nursing Home Arbitration Act (H.R. 1237 and S. 512), which would eliminate mandatory binding arbitration clauses from nursing home contracts.

The coalition has launched a Web site, www.FairArbitrationNow.org, outlining its view of mandatory arbitration, the kinds of contracts in which such clauses appear, providing links to news articles and telling stories of what it views as “arbitration horrors.”