For Immediate Release
Legislation Would Empower Consumers Over Corporations, Give Them Their Day in Court
Statement by Christine Hines, Consumer and Civil Justice Counsel, Public Citizen’s Congress Watch Division
WASHINGTON - Note: The U.S. Senate Judiciary Committee is holding a hearing today on the Arbitration Fairness Act (S. 987) introduced in May by Sen. Al Franken (D-Minn.). Additionally, Public Citizen is releasing today a white paper that details how wireless companies have escaped accountability for harming consumers with unfair and deceptive practices.
In a time when corporations are running roughshod over ordinary Americans while spending millions to lobby Congress and fund political campaigns, consumers need more protections, not fewer.
The Arbitration Fairness Act (S. 987) and the Consumer Mobile Fairness Act (S. 1652) would give consumers just that. The former would end a common predatory practice – forced arbitration – in which people who open bank accounts, buy cell phone services, hire homebuilders, take a job and even play video games online, are forced to surrender their legal rights when they sign the paperwork or click “I agree” on an online contract. The Consumer Mobile Fairness Act would eliminate this same practice more narrowly for the hundreds of millions of consumers who use wireless devices.
With forced arbitration, corporations shield themselves from accountability for wrongdoing: They can choose the rules of the arbitration, the place it will occur, the payment terms and who the arbitrator will be – often a firm that receives the company’s repeat business.
The U.S. Supreme Court ruled in its April decision in AT&T Mobility v. Concepcion that corporations may use arbitration clauses to cut off consumers’ and employees’ right to join together through class actions to hold powerful corporations accountable. The decision overruled the laws of 20 states.
Class-action bans are particularly harmful in the case of cell phone companies whose bad practices often appear in the form of small individual unlawful charges on consumers’ cell phone bills – often too small for a single customer to pursue claims on his or her own. Class actions are better equipped to facilitate these types of disputes. Now that wireless companies are permitted to ban class actions, they can commit any number of bad acts against consumers without being held accountable. U.S. Sens. Richard Blumenthal (D-Conn.), Al Franken (D-Minn.) and Sheldon Whitehouse (D-R.I.) introduced the Consumer Mobile Fairness Act to restore consumers’ rights in their dealings with the wireless industry. We fully support their efforts.
The Concepcion ruling makes it even more imperative that Congress pass these bills so that people can choose whether to arbitrate their claims or go to court, rather than allowing corporations to force them into a one-sided, secretive process.
Public Citizen is a national, nonprofit consumer advocacy organization founded in 1971 to represent consumer interests in Congress, the executive branch and the courts.