Mandatory consumer arbitration must end

From the Leif Cabraser blog:

The federal Consumer Financial Protection Bureau (CFPB) proposed a potentially transformative new rule on Thursday regarding forced arbitration agreements that strip consumers of financial products of their basic constitutional rights. If approved, the proposed rule will bar financial institutions like banks and credit card companies from using forced arbitration clauses to prevent consumers from filing class action lawsuits. These clauses left consumers with no court options and locked them into unbalanced private arbitration…..

Forced arbitration is unconstitutional and undemocratic. Consumers have no choice. And arbitration is and always will be heavily stacked in favor of repeat customers who pay the bills to keep arbitration alive in the first place, i.e., the corporate interests.

Arbitrators themselves favor corporations over consumers and always will because of the systematic incentives.

Imagine playing a basketball game where the refs are paid by your opponent and can be fired by your opponent at any time for any reason. That’s arbitration from a consumer point of view.

The system is rigged.

Hopefully, though, these kind of small victories will lead to larger, systematic changes.

Arbitration between large sophisticated businesses may make sense occasionally.

Arbitration between large corporate interests and consumers will never be fair or appropriate.