Before you sign: Read the fine print
by Carol Thompson
Hidden in the fine print of many consumer contracts – from credit cards and cell phone contracts to nursing home care and employment contracts – are dangerous forced arbitration clauses. Consumers and employees are often unaware that they have signed away their legal rights until it’s too late.
Sometimes the fine print is so fine it’s near impossible to read. And failure to sign can often mean a company will refuse to do business with the consumer.
Many Americans are unaware that the arbitration clause forces the consumer into arbitration and there are no laws prohibiting companies from using fine print. Many consumer advocates have lobbied for laws to limit the rights of an advertiser to use fine print to hide the truth and to expand rights to consumers who fall victim to fine print.
Laws that have been passed have been subsequently overturned by the U.S. Supreme Court.
For the consumer who doesn’t read the fine print, the arbitration clause is unknown until such time a dispute occurs.
According to Take Justice Back, Americans are hurt by the fine print because:
- One-sided Requirements – Most forced arbitration clauses require the consumer to waive their rights, while allowing the corporation to sue in court.
- High Costs – Consumers often must pay steep filing fees just to initiate a case and pay their share of the arbitrator’s hourly charges. In addition, forced arbitration clauses often allow the corporation to choose the location, regardless of how inconvenient or costly travel will be for the consumer.
- Biased Decision-Makers – Since only businesses are repeat users of an arbitrator, there is a disincentive for an arbitrator to rule in favor of a consumer if he expects further retentions.
- Weak Civil Justice Safeguards – Forced arbitration clauses often severely restrict the individual’s ability to argue his or her side of the case. For example, many restrict the individual’s ability to obtain necessary evidence. Also, it is nearly impossible to appeal adverse decisions by arbitrators.
- Secret Backroom Proceedings – While proceedings and records of the courts are open to the public, most forced arbitration clauses require that proceedings be kept confidential, even if the case raises important public health and safety issues.
Even state attorney’s general are opposed to arbitration clauses (see related story), claiming it denies Americans of the right to due process.
While proponents of arbitration claim it’s more cost effective for consumers to go through the arbitration process, hundreds of consumers have complained that the costs were exorbitant.