SAN ANTONIO – Whether you realize it or not, there’s a good chance you have given up your right to take problems with a product or service to court. The reason is what’s called a forced arbitration clause that may be buried in the fine print.
Forced arbitration clauses have become more common when you sign up for things like credit cards and mobile services, online purchases and products ranging from washing machines to mattresses to cars.
Experts at Consumer Reports say there is cause for concern as many companies are making easy-to-miss but important changes in their sales agreements.
“Basically, it means you have giving up your right to take a dispute to court,” said Scott Medintz, of Consumer Reports. “This is your constitutional right and you’re giving it up even before you know that there’s a dispute.”
Arbitration clauses typically are buried in the fine print of product manuals and websites. Many people don’t even realize they are agreeing to them.
“The implications for consumers are huge,” Medintz said. "Many of the rules that are in place to ensure fairness in the court system are missing from arbitration. "
Unlike a court of law, which is open and public, arbitration is private with no public record. Arbitration does not allow people to join together to fight back such as they did in the Volkswagen emissions class action lawsuit.
“The concern is that companies are using arbitration to preemptively crush consumer objections to their practices, whether those practices are unsafe or predatory or even illegal," Medintz said.
One way to protect yourself is to buy from companies that don’t make you forfeit your legal rights in advance. That means reading the fine print ahead of time.
Congress is tackling the issue. In September, the U.S. House of Representatives passed a measure that would ban forced arbitration. It’s now in the Senate.