Forced into Arbitration [Infographic]

Posted December 13, 2012 in Consumer Law by

With the holiday shopping season upon us, who has time to read the fine print? 

Consumer advocacy groups say watch out for big companies’ special deals made to benefit the company, not the buyer. When consumers purchase products and services, they are often forced to sign contracts where they surrender their rights to trial and instead agree to arbitration if something goes wrong. 

Computers, electronics, toys, and the different methods used to buy such products or gifts often come with arbitration clauses. The language says if you’re unhappy with the product or service, you can’t take the company to court. Instead, you agree to take your dispute to arbitration. That means a panel of arbitrators, selected by the very business which you sued, decides the outcome of your complaint.

Paypal, American Express, Verizon Wireless and Dell are examples of companies that have these arbitration clauses. 

The consumer’s only choice is not to buy the product or service, or agree to arbitration. As the businesses select (and often return to) the same arbitrators, the process hardly seems objective. These agreements also make the consumer pay expensive arbitration costs and travel to the location where the corporation wants the case decided. Unlike a court case, arbitration remains confidential and closed to the public, even when health and safety issues are involved. However, many businesses argue that mandatory arbitration avoids frivolous lawsuits, and therefore ultimately saves consumers money.

The American Association for Justice supports the Arbitration Fairness Act of 2011 (S. 987 / H.R. 1873). This bill would end forced arbitration clauses but still allow consumers to choose arbitration as a dispute resolution option. 

You can check out to learn more.


This infographic was provided by the American Association for Justice. More information is available at the website

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