Mandatory Arbitration

Mandatory arbitration agreements can be particularly damaging to the consumer. These terms require the consumer to give up any rights they have to recover damages from the company under the contract in a traditional court. Instead, consumers must go through arbitration that is typically governed by an arbitrator chosen by the company. The choice of arbitrator is particularly worrisome, as companies can select arbitrators that they have a relationship with or that have a particular reputation. Companies often name arbitrators that are related to their industry, and the record for consumers is astonishingly poor. Moreover, the Federal Arbitration Act supports the effectiveness of mandatory arbitration clauses and even restricts states from passing laws against their enforceability.

For lots more information, www.fairarbitrationnow.org is a website devoted to informing consumers of the dangers of mandatory arbitration.