Watchdog Blog

NAF's Weak Response to Business Week

By Graham Steele & David Arkush

The National Arbitration Forum (NAF) has responded to Business Week's investigation of NAF's shady, for-profit arbitration practices. The rebuttal is full of irrelevancies, inaccuracies, and misrepresentations:

• NAF argues that "arbitration outcomes are the same as court outcomes for similar types of cases," citing a Chamber of Commerce-funded report by Catholic University law professor Peter Rutledge. But the Business Week story explains that NAF markets itself by saying the opposite -- that arbitration provides a "marked increase in recovery rates over existing collections methods." (Not to mention that companies can "control the [arbitration] process and timeline," and that "93.7% [of arbitrations] are decided without consumers ever responding.")  Who do you think NAF is lying to -- the public or its clients?

Business Week Looks Inside Arbitration Firm, Finds Shady Practices

By Graham Steele

In case you missed it, Business Week published an excellent story last week that highlights the abuses of pre-dispute binding mandatory consumer arbitration.  As you probably know by now, many consumer service contracts (credit cards, cell phones, cable/internet/telephone service, car purchase agreements, computer purchase agreements, etc., etc.) force individuals to resolve disputes in arbitration instead of court. Despite its innocuous sounding name, arbitration is a legally binding process. Most egregiously, companies that force their customers into arbitration actually hire the very arbitration firms that rule on disputes.

If you're an American consumer, chances are that you could be required to submit to arbitration before the NAF: their list of corporate clients includes Bank of America, Citibank, Discover, General Electric, JPMorgan Chase, Lowe's, Sears, Circuit City, Sallie Mae, and Toyota Motor Credit.  The article describes, in vivid detail, NAF's private, for-profit dispute resolution enterprise designed to secure repeat business for them and the highest possible judgment for their corporate clients.  Arbitration companies are essentially operated like judgment mills: consumers are rarely given notice and a chance to participate, most arbitrator decisions are made in a few minutes, and arbitrators are pressured to aware fees that would not be authorized in civil court. 

Some of the article's key findings:

• NAF actively markets itself to large companies as providing a “marked increase in recovery rates over existing collection methods.” The article also explains: "current and former NAF arbitrators say they make decisions in haste—sometimes in just a few minutes—based on scant information and rarely with debtor participation."
• NAF educates its corporate clients on ways to manipulate procedural rules to their advantage, even explaining how corporations can bring poorly documented cases with assurance that they won’t lose: either the consumer will not respond and the company will win by default, or, in the event that the consumer disputes, the company can ask for a stay or a dismissal. (If the case is dismissed, the company can always re-file later.)
• Companies can also exploit rules and basic institutional pressures on arbitrators to ensure that they get a sympathetic “judge.”  They can drop and re-file a case if they get an arbitrator that they don't like, or simply demand that an arbitrator that they don't like be removed from all of their cases.
• As part of an ongoing business strategy, NAF colludes with law firms specializing in debt collection to promote the use of arbitration to the law firms' corporate      clients.  This is akin to a judge coordinating with lawyers to persuade the lawyers' clients to bring suits to the judge – with the judge getting paid more when he hears more cases and the lawyers getting paid more when they win.

Senator Feingold Argues for Consumers' Rights

On Friday DMI posted an op-ed by Senator Russell Feingold (D-Wisc.) in which he explains the dangers for consumers of business-mandated arbitration.  Senator Feingold has demonstrated an impressive understanding of the problems that arbitration poses for consumers ever since he wrote very eloquently on this topic in 2002.  In his most recent piece, Senator Feingold makes several forceful points about the nefarious aspects of involuntary consumer arbitration:

Where Customers are Never Right

Over at Creditcards.com -- a website that helps people pick (you guessed it) credit cards -- there is an article warning consumers about binding mandatory arbitration.  They highlight the dangers of forced arbitration and its differences from the civil justice system. 

One of the most alarming is that unlike court judges, arbitrators do not have to obey the rule of law.  They can ignore key evidence and flout the law because their decisions are usually secret (unless both parties agree to make them public) and are rarely appealable to a real court.  It’s no surprise then that Public Citizen’s report, The Arbitration Trap, uncovered that consumers lose 94 percent of the time in arbitrations in California.

Want to avoid forced arbitration?  Your only choices are to get an AARP card (if you happen to be a senior citizen) or join one of the credit unions that doesn't require it. 

If you get trapped in arbitration, read their tips to help keep things fair.

Nursing Home Arbitration

The Wall Street Journal recently published ($) an excellent front-page article describing one of the more egregious incarnations of binding mandatory arbitration – nursing home admission agreements. The money quote:

Nursing homes' average costs to settle cases have begun dropping, according to an industry study, even as claims of poor treatment are on the rise. The industry notes arbitration is slicing the number of patients winning big punitive judgments, the added penalties for severe negligence that can pump up the size of jury awards. Meanwhile consumer advocates, plaintiffs’ lawyers and even some arbitrators are decrying the practice.

The article goes on to describe the case of one Mary Hight, whose nursing home wouldn’t call an ambulance despite her being dehydrated and ill for days. Her daughter, Janice Cowart, resorted to pushing her uphill to a nearby hospital, where she died the next day. Even though the “arbitrator found the home was negligent both in allowing Ms. Hight to become dehydrated and failing to get her to an emergency room,” he only awarded $90,000. After legal fees from the arbitration, “We didn’t get one cent,” said John Estep, Janice Cowart’s brother.

Will the Pro-Civil Justice Candidates Please Stand Up?

Public Citizen is proud to join the Drum Major Institute and its coalition of organizations to support the “Pro Civil Justice Presidential Platform.”  Our goal is to get the attention of the presidential candidates and ask them to support our civil justice platform:

•Provide counsel for people who cannot afford it any important case;
•Ban forced arbitration in consumer contracts;
•Stop federal preemption of state consumer protection laws;
•Reduce secret settlements that keep health and safety information from the public;
•Ensure injured patients’ right to justice; and
•Effectively regulate the insurance industry to curb unfair practices.

These issues have been conspicuously absent from the candidates’ stump speeches.  We are not sure why, but we are going to find out.

WSJ's Recent Run on Forced Arbitration

by David Arkush and Taylor Lincoln

Wall Street Journal readers have heard a lot about binding mandatory arbitration recently. On Saturday, the newspaper’s editorial board used the Chamber of Commerce's biased survey on arbitration as justification for a fact-twisting polemic against the civil justice system. Today, the paper reported on a lawsuit against the National Arbitration Forum by the city of San Francisco, and readers weighed in with views on arbitration far more reasonable than those of the editors.

The Journal's editorial touted a recent Chamber survey claiming that 82% of voters would prefer to resolve a dispute with a company in arbitration in contrast to only 15% in litigation. Of course, survey participants were not informed that if a company forces you into arbitration, the company picks who resolves the dispute (what would Memphis think if Kansas got to pick the referees for tonight’s NCAA championship game?). Participants also weren’t told that these biased decisions are binding and almost always final -- meaning no appeals even if the decisions contain “silly factfinding” or are just plain “wacky.” (The are quotes from the Supreme Court and a federal appeals court!) Needless to say, the Journal’s opinion writers didn’t mention these flaws in the survey.

U. S. Chamber of Commerce Attacks Arbitration Fairness Act, Surprised?

The U.S. Chamber’s Institute for Legal Reform (ILR) yesterday launched a campaign to scuttle important consumer legislation pending in Congress.  The attack is aimed at the Arbitration Fairness Act (S. 1782/H.R. 3010) which is designed to protect consumers, employees and others from having binding arbitration imposed as the only means by which their disputes may be resolved.  For those of you who don’t know, the current problem with arbitration is its growing use by business to provide an edge in resolving disputes with their customers – and it’s appearing everywhere.  If you have a cell phone, credit card, bank account, auto loan, brokerage account, or a number of other goods services, chances are you’ve signed away your right to sue if things go wrong, without even knowing it!

This recent attack by the Chamber is in response to Public Citizen’s detailed report issued last fall which found that arbitrators employed by the National Arbitration Forum ruled against consumers in 94.7 percent of the 19,000 cases involving credit card holders.

Wall Street Investors Oppose Arbitration

Who doesn't like binding mandatory arbitration?  In addition to Comcast customers, KBR employees, car dealerships, and credit card holders, now public investors have voiced their opposition.

According to a recent survey by the Securities Industry Conference on Arbitration (SICA), participants in the NASD and NYSE arbitrations overwhelming felt they were unfair and were dissatisfied with the outcome.  The North American Securities Administrators Association offers a glimpse into why--

Currently, almost every broker-dealer includes in their customer agreements a predispute arbitration provision that forces public investors to submit all disputes that they may have with the firm and/or its associates to mandatory arbitration. Securities arbitration cases are heard by a three-member panel that includes one “non-public” or securities industry member, and two “public” members, who may have worked in the industry. Neither of the public arbitrators is required to be an investor advocate, even though the non-public arbitrator is required to be an industry representative.

It's no wonder that many investors could feel "trapped."

Some interesting numbers:

• Nearly half of the customers who expressed their views believed their arbitration panel was biased;
• 62 percent believed the arbitration process was unfair;
• 70 percent were dissatisfied with the outcome;
• 49 percent stated that the arbitration process was too expensive, and;
• A striking 75 percent of customers who compared their arbitration process to their civil litigation process indicated that arbitration was “very unfair” or “somewhat unfair” compared to court.

Download the full report.

Halliburton Victim Twice Over

Today, Jamie Leigh Jones will appear before the House Judiciary Committee and tell how she was gang raped by her co-workers in Iraq while working for a Halliburton subsidiary called KBR. Afterwards, her assaulters confined her to a shipping container and warned that if she left Iraq for medical treatment, she’d be fired. That’s where she was found by agents sent by the U.S. embassy to rescue her — after her father called their congressman, Representative Ted Poe (R-Texas).

Now, Jamie Leigh Jones has been victimized twice over. Because KBR/Halliburton requires employees to sign contracts containing a binding mandatory arbitration (BMA) in the fine print, Jones is being denied her constitutional right to bring her perpetrators before a jury and be heard.

But Jamie Leigh Jones will be heard by Congress today — and then, lawmakers should waste no time in re-opening the doors of justice for Jones and the rest of us. It’s time to ban binding mandatory arbitration in employment and consumer contracts once and for all. There may be no other device being used today by Halliburton and other corporate giants that does more to systematically deny rights to workers and consumers.

Congress is beginning to focus.

A Self-Inflicted "Crisis"

When NY’s Superintendent of Insurance announced a 14 percent across-the-board rate hike for medical liability insurance on July 1, 2007, doctors raised a hue and cry that the increase threatened a crisis in access to care because doctors could no longer afford to practice in New York and would be leaving the state or otherwise restricting their medical practices.  As in the past, doctors again blamed the premium increases on skyrocketing claims and lottery awards and demanded tort reforms that would cripple meritorious malpractice claims by the victims of medical negligence.

Today Public Citizen released a report that exposes these claims of the doctors as full blown, deliberate and obvious exaggeration: A Self-Inflicted “Crisis:” New York’s Medical Malpractice Troubles Caused by Flawed State Rate Setting and Raid on Rainy Day Fund. These same claims have been made by doctors during each of the three cycles of rising premiums that have occurred over the past thirty-plus years. Our report shows that rising malpractice premiums are not the result of any escalation in the frequency or severity in malpractice payments. The increase has nothing to do with patients, lawyers, judges, or our courts. It reflects an insurance problem.

Public Citizen’s analysis of the best available New York data demonstrates that the number of malpractice payments made on behalf of doctors in 2006 was at its lowest point since 1991. The total amount of malpractice payments for doctors, adjusted for inflation, was near or below fifteen year average in three of the past five years.

The amount of malpractice litigation in New York has not changed appreciably over the past eleven years. Thus, it is clear that the 14 percent increase in premiums did not reflect a sudden or dramatic change in either malpractice payments or litigation behavior.

A Lemon Court

Car dealers aren't doing much for their image these days - so, buyers beware.  Though it's not surprising, Mother Jones reports that car dealers are increasingly turning to a sneaky little device to relieve themselves of accountability when a deal goes bad: binding mandatory arbitration. If you were to try to sue them for say, selling you a lemon, you might find yourself tapped in arbitration.  Binding mandatory arbitration is a losing proposition for consumers, as we found in our recent report on how credit card companies use the predatory practice.

Ironically, these same car dealers fought tooth and nail just a few years ago to ban similar arbitration clauses in their contracts with car manufacturers:

The National Automobile Dealers Association wrote members of Congress in 2000 that if they weren't outlawed for the dealerships, mandatory binding arbitration clauses would allow "multinational motor vehicle manufacturers…to be able to unilaterally deny small business automobile and truck dealers rights under state laws that are designed to bring equity to the relationship between manufacturers and dealers." Congress agreed and passed legislation protecting the dealers.

The good news is that Congress is considering a ban on binding mandatory arbitration in consumer and employment disputes.  Please take a minute now to let your members of Congress know that you want to keep your right to take shady businesses to a public court with a judge or jury, instead of being trapped in a rigged, for-profit system where bad business practices flourish.

Party at Joan's

Earlier this month, the Wall Street Journal ran an editorial accusing us of being hand-puppets of their favorite boogie men-- the trial lawyers--because we oppose binding mandatory arbitration.  According to the Journal, our work to preserve the constitutional right to a trial by jury makes us all cabernet-swilling sell-outs. 

In her published letter to the editor, Public Citizen President Joan Claybrook sets them straight: 

"Party at Joan's"
November 17, 2007; Page A9

Your Nov. 7, broadside ("Party at Ralph's") on arbitration was baseless. We
oppose mandatory not voluntary arbitration requirements buried in the fine print of consumer contracts because they shred consumers' legal rights in favor of a secret, expensive, business-dominated system.

The consumer attorneys attending a reception at Public Citizen's office are
legal aid and private attorneys who toil in some of the least glamorous
corners of the law. They see firsthand the unfairness of this
industry-created system to avoid accountability. They work for consumers
harmed by home foreclosures, truth-in-lending violations, unfair debt
collection practices, predatory lending, auto dealer fraud and other
marketplace abuses.

To acquire a credit card, buy a home or car, open a bank account, use a cell
phone or get cable television, consumers usually must sign a contract
mandating arbitration to settle disputes. A mere signature effectively
eliminates their constitutional right to the public courts, extinguishes the
right to appeal, favors corporate repeat offenders whom arbitrators want to please and imposes substantial upfront costs.

Hey, it's better than indentured servitude

The lending industry gets a lot of flak for the way it conducts business.  Tactics such as targeting the working poor and racial minorities, imposing prepayment penalties, forcing pre-dispute arbitration clauses into contacts and setting other devious debt traps have received a lot of scrutiny.  Sure, no one likes to see a veteran and his family get kicked to the curb.  But you have to admit, it's a heck of a lot better than indentured servitude.

Kidding aside, Congress is taking action to help protect consumers.  Or is it? 

On Thursday, the House passed the Mortgage Reform and Anti-Predatory Lending Act of 2007 (H.R. 3915) in a 291-127 vote.  While it would do some good like requiring lenders to evaluate a borrower's ability to repay a loan, there are several provisions that consumer advocates and public interest groups are warning will make things worse for borrowers [PDF].

For example, a broad preemption provision would make current and stronger state laws on predatory lending obsolete.  Homeowners whose loans were sold off--usually to some Wall Street investment group--would be unable to fight back in foreclosure because there would be no meaningful federal protection from abuses by the new owners of their loans.

See if your Rep. voted for H.R. 3915.  If so, tell them they just took a big step backwards for consumers (House directory | 202-224-3121).

Scary Movie Night

Public Citizen and Americans for Fairness in Lending teamed up to invite people host a scary movie night in the spirit of Halloween.  We offered to supply hosts with a copy of Maxed Out (while supplies lasted), our report "The Arbitration Trap: How Credit Card Companies Ensnare Consumers," a discussion guide and party favors if they invited friends and family over to share horror stories of consumers being haunted by credit card companies.

The response has been amazing.  From Alaska to Maine and from Wisconsin to Texas, people signed up to host movie nights.  And they are not just happening in living rooms.  People are hosting movie nights at high schools, universities, churches, community centers and even one overseas military base.  Before long, we ran out of our supply of free DVDs, but people still wanted to educate others about this issue and so either bought or rented a copy to screen.

Here is some of the feedback we have received from hosts so far:

"My guests and I couldn't believe what credit card companies are doing with these arbitration clauses.  I cut my card up and am looking for one that does not use them."
-Michael from Illinois

"I've decided to cut back on my credit card use because I'm furious with the shady business tactics they use with us. I'm really glad I signed up for the movie night and will try to reorganize it again for maximum effect."
-Holiday from California

"Maxed Out movie night was great! ...we paused the movie several times to discuss what the movie was talking about...We have decided to get involved with the college and high school kids and make this a huge event."
-Nanette from Oregon

Interested in hosting a Maxed Out Movie Night?  Sign up here.  If you find a copy of Maxed Out, we will send you an event kit with everything you will need.

Consumers Win in Hearing on Capitol Hill

Written by Paul Bland

On October 25, 2007, the House Judiciary Committee’s Subcommittee on Commercial and Administrative Law held its second hearing on H.R. 3010, Rep. Hank Johnson's Arbitration Fairness Act. (This Subcommittee has jurisdiction over the bill.) H.R. 3010 would ban the use of pre-dispute binding mandatory arbitration in consumer, employment, franchise and medical contracts. (The first hearing was held on June 12th. I testified at it, and my testimony and a transcript of the hearing can be found on the Public Justice website.)

Three members of the Subcommittee attended the hearing. The first is Subcommittee Chairwoman Linda T. Sanchez. Rep. Sanchez has not yet co-sponsored the bill, but she spoke very sympathetically towards the situation of consumers and employees who have been treated poorly in mandatory arbitration systems. It also can’t be understated that Rep. Sanchez showed that she has put a lot of time into understanding the details of the issue, and she (along with her staff) have obviously put a great deal of work into interviewing and locating witnesses and giving both sides an opportunity to develop an extensive record. The second is Rep. Johnson, the sponsor of the bill, who is a courtly freshman representative from Georgia and a powerful orator. The third member was Ranking Subcommittee member Chris Cannon, who is a huge and uncritical fan of mandatory arbitration. In the course of carrying the water of the Chamber of Commerce on the issue, Rep. Cannon’s duties apparently include trying to craft personal attacks on anyone who comes forward with an individual story of having been abused by mandatory arbitration.

There were two panels. On the first panel:

Laura MacCleery, Director of Public Citizen's Congress Watch Division, who spoke about Public Citizen's report ("The Arbitration Trap: How Credit Card Companies Ensnare Consumers") summarizing more than 34,000 arbitrations handled by the National Arbitration Forum in California, and who also spoke in some detail about the problem of arbitration clauses that ban class actions. I have written in several forums that our law firm’s experience (interviewing hundreds of consumers, and dozens of consumer lawyers, strongly supports the conclusions of Public Citizen’s groundbreaking report). Laura spoke with fervor and energy, and was very articulate. Rep. Cannon tried to get her to admit that Public Citizen’s report is very limited in scope, but Laura pointed out (correctly) that it covered EVERY SINGLE case that the National Arbitration Forum reported handling in California over a period of several years.

Written by Paul Bland

On October 25, 2007, the House Judiciary Committee’s Subcommittee on Commercial and Administrative Law held its second hearing on H.R. 3010, Rep. Hank Johnson's Arbitration Fairness Act. (This Subcommittee has jurisdiction over the bill.) H.R. 3010 would ban the use of pre-dispute binding mandatory arbitration in consumer, employment, franchise and medical contracts. (The first hearing was held on June 12th. I testified at it, and my testimony and a transcript of the hearing can be found on the Public Justice website.)

Three members of the Subcommittee attended the hearing. The first is Subcommittee Chairwoman Linda T. Sanchez. Rep. Sanchez has not yet co-sponsored the bill, but she spoke very sympathetically towards the situation of consumers and employees who have been treated poorly in mandatory arbitration systems. It also can’t be understated that Rep. Sanchez showed that she has put a lot of time into understanding the details of the issue, and she (along with her staff) have obviously put a great deal of work into interviewing and locating witnesses and giving both sides an opportunity to develop an extensive record. The second is Rep. Johnson, the sponsor of the bill, who is a courtly freshman representative from Georgia and a powerful orator. The third member was Ranking Subcommittee member Chris Cannon, who is a huge and uncritical fan of mandatory arbitration. In the course of carrying the water of the Chamber of Commerce on the issue, Rep. Cannon’s duties apparently include trying to craft personal attacks on anyone who comes forward with an individual story of having been abused by mandatory arbitration.

There were two panels. On the first panel:

Laura MacCleery, Director of Public Citizen's Congress Watch Division, who spoke about Public Citizen's report ("The Arbitration Trap: How Credit Card Companies Ensnare Consumers") summarizing more than 34,000 arbitrations handled by the National Arbitration Forum in California, and who also spoke in some detail about the problem of arbitration clauses that ban class actions. I have written in several forums that our law firm’s experience (interviewing hundreds of consumers, and dozens of consumer lawyers, strongly supports the conclusions of Public Citizen’s groundbreaking report). Laura spoke with fervor and energy, and was very articulate. Rep. Cannon tried to get her to admit that Public Citizen’s report is very limited in scope, but Laura pointed out (correctly) that it covered EVERY SINGLE case that the National Arbitration Forum reported handling in California over a period of several years.

Credit Card Report on Marketplace and More

Last week we released our report on credit card companies forcing consumers into binding mandatory arbitration and interest has been very high.

Listen to a short piece on American Public Media's program, Marketplace, or you can read more on The Consumerist where Ben Popken blogged about what consumers are up against, as did Elizabeth Warren on TPM Cafe.  We are really pleased to have the word spread so that together we can end the predatory practice of mandatory arbitration. 

You can download The Arbitration Trap: How Credit Card Companies Ensnare Consumers here.  Also, learn what you can do to protect yourself and tell Congress to stand up for consumers. 

Beware the Arbitration Trap the Credit Card Companies Set for You

Earlier this summer, we sounded the alarm about binding mandatory arbitration (BMA) clauses in the fine print of cable bills sent out by Comcast.  Comcast was not the first company to pull this trick on consumers and, sadly, we’ve learned it is far from the last.

Today, Public Citizen releases a ground-breaking report, The Arbitration Trap: How Credit Card Companies Ensnare Consumers [pdf]. It shows how credit card companies rig their contracts with consumers, using binding mandatory arbitration to evade accountability, strip consumers of their rights and enforce their will. In fact, arbitrators rule for business between 94 and 97 percent of the time.

In a nutshell, BMA is private, corporate-dominated secret “court” that overwhelming rules against consumers. In this world, merely by signing your name on the dotted line, you have forfeited your right to a trial by jury. If someone steals your identity and runs out to buy a $4,000 plasma TV – and the credit card company wants YOU to pay for it – the dispute will automatically bypass the public civil justice system. Instead, it goes straight to an arbitrator who may have heard thousands of cases for that same credit card company. 

Comcast Getting Push Back

Last month, when we warned that consumer rights were being threatened by a little pamphlet quietly slipped into cable bills by Comcast, there was an outcry from Comcast customers. Now elected officials in Maryland are taking notice.

Today, the Washington Post reports that the Montgomery County Executive and at least one member of the state legislature are taking extraordinary steps to alert residents about the anti-consumer practice of binding mandatory arbitration:

"Comcast's unilateral action to change the subscriber agreement, with an artificial 30-day deadline, is simply anti-consumer," council member Duchy Trachtenberg (D-At Large), who chairs a management and fiscal policy committee, said in the release.

Jane E. Lawton (D), a state delegate who also serves as county cable administrator, called the policy change "one-sided."

County Executive Isiah Leggett said: "Vendors should not change the terms of service without first receiving the consent of the consumer, and the fact that Comcast has not done this is disturbing."

Comcast isn’t telling where else they are forcing consumers with disputes into binding arbitration without any recourse in the civil justice system.  We have heard reports of the notice being found in cable bills in Florida, D.C., Virginia, Delaware, and Massachusetts. However, Comcast operates in 39 states and the District of Columbia, so chances are other states are affected.      

What can you do? We have opt-out instructions and other ideas on our former blog post.  But you also might contact your county and state representatives and complain loudly about Comcast’s bad business practices.

Protect Your Rights – Opt Out of the "Comcastic" Fine Print

This month, Comcast consumers in Maryland had a little pamphlet called "Arbitration Notice" quietly slipped into their cable bill.

All the legalese can be boiled down to one sentence: "You have 30 days to opt-out of being automatically enrolled in our arbitration clause, thereby forfeiting your right to settle disputes with Comcast in a court of law in a trial by judge or jury."

This unfair and stealthy move by Comcast strips consumers of their rights. Access to justice in the courts is a longstanding cornerstone of corporate accountability.  Arbitration, on the other hand, is a private system stacked in favor of corporations – and an arbitrator’s decision, even if it’s wrong or absurd, cannot be appealed on the merits. 

Comcast is not just bullying consumers in Maryland, whose deadline to opt-out is July 15, 2007.  They are forcing consumers elsewhere into giving up their rights.  The mandatory binding arbitration is now a fixture in the Comcast “Terms of Use”.

Here’s how to stand up to Comcast and its corporate bullying:

• Opt Out: Go to Comcast's online opt-out form and preserve your rights (Don't forget to check the opt-out box!).  This will NOT affect your service.
• Make Noise: Call up Comcast – 1-800-COMCAST (1-800-266-2278) – and complain that they are automatically enrolling customers into their arbitration clause.  Demand to be allowed to opt-out of the binding mandatory arbitration clause!
• Tell a friend: email this post to friends and family.

You also can support the newly introduced legislation to ban the most egregious uses of binding mandatory arbitration clauses.  Be sure to tell us about your experiences with Comcast in the comments section below.

A Good Day for Consumer Justice

Many Americans are unknowingly stripped of their rights when they sign up for health insurance, cable television or credit cards.  Buried in the fine print of these contracts are clauses that force harmed consumers into a private system that is stacked in favor of giant corporations - sometimes with devastating consequences (see the comments).  Binding mandatory arbitration clauses are proliferating in contracts everywhere.

But now we can tip the scales back in favor of consumers.  Yesterday, Senator Russ Feingold (D-Wisc.) and Representative Hank Johnson (D-Ga.) introduced a groundbreaking legislation to restore the rights of millions of consumers, the Arbitration Fairness Act.  This measure bans the use of binding mandatory arbitration in employment, consumer, franchise or civil rights disputes.

Public Citizen's President Joan Claybrook had this to say at today's press conference:

Let me be blunt. Privatizing justice benefits big corporate interests like national banks and insurance companies but does not help ordinary people. Corporations have figured out that simply by inserting an arbitration clause in contracts for everyday consumer goods and services or employment, they can usually evade accountability for any harm they cause or laws they break -- laws meant to protect consumers and employees from the misuse and abuse of corporate power in the marketplace.

How? First, the contracts are take-it-or-leave-it, so individuals have no choice but to accept the arbitration clause if they want the product, service or job, even if they are required by law to buy the service, as is the case with auto insurance, or required by life's uncertainties to purchase a much-needed service like health insurance.