Consumers Union
Nonprofit Publisher of
Consumer Reports
Thursday, July 12, 2007
Consumers Union Supports Legislation to Protect Jury System;
Mandatory Binding Arbitration Clauses Harm Consumers
Statement of Sally Greenberg, Senior Counsel for Consumers Union
Washington, DC—Consumers Union thanks Senator Feingold and Congressman Johnson for leading the charge to protect consumers from mandatory binding arbitration clauses tucked into contracts. In doing so, they are helping to restore justice and fairness to our legal system—a place where consumers and the largest corporations should be on an even playing field.
Mandatory binding arbitration clauses – ubiquitous today in consumer contracts of all kinds – for housing, healthcare, cell phones, credit cards, car sales – have created a private system of justice set up by the business community for the benefit of the business community. These clauses strip consumers of the basic rights all of us take for granted – the right to pay a modest filing fee and take a dispute to court if we’ve been cheated or ripped off, have our case heard before an impartial judge paid by taxpayers, not a private company, have a right to a written record based on law and the right to appeal the judge’s decision. Mandatory binding arbitration strips consumers of all of those rights.
Five years ago Congress acted to protect auto dealers from having these unconscionable and one-sided clauses imposed on them by auto manufacturers. Congress passed a law prohibiting these clauses from being imposed on auto dealers. Senator Orrin Hatch (R-UT) and Congresswoman Mary Bono (R-CA) led the fight for the auto dealers. 52 Senators co-sponsored Senator Hatch’s bill, including many Republicans and Democrats.
Unfortunately, most consumers, particularly those who are taking out loans to buy cars today, are required to sign contracts with these clauses. Auto dealers are on record saying they would not oppose a law that would protect auto buyers from being forced to sign mandatory arbitration clauses in their contracts with auto dealers.
Clearly it is time for Congress to balance the playing field for all parties, and restore to consumers their right to have access to our justice system and not be denied basic fairness and equity. Consumers Union joins with Senators Russ Feingold and Congressman Hank Johnson in launching this effort to restore basic rights to American consumers and thanks them for their leadership.
Contact: Sally Greenberg, 202-631-2301
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