When the devil is literally in the details

Let’s face it: Corporations don’t use forced arbitration for the good of the consumer; they use it to get away with things—sometimes very bad things—like pet stores knowingly selling you a sick puppy that dies in your arms a week later; online furniture retailers mailing customers bedbug-infested headboards; or nursing homes neglecting your elderly mom, who has dementia and can’t fend for herself.

For the (fortunately) uninitiated, forced arbitration occurs when you unwittingly sign away your constitutional right to a court trial (due to a clause that’s typically hidden in the fine print of a contract). You “agree” to instead have your grievances with the company settled by an arbitrator (typically chosen by the company). This occurs daily in America—in cell phone, credit card and even employment contracts. What many of the tens of millions of consumers governed by forced arbitration don’t realize, however, is that the devil is literally in the details. How so? Let’s get back to our appalling, real world examples.

The Humane Society said an investigation into Petland revealed that at least one Petland owner feels confident that, due to an arbitration clause the corporation added to its purchase contracts, “they [customers sold sick/dying animals] can’t take us to court. They can’t sue us or anything.” As the Humane Society, Petland employees and numerous lawsuits have revealed, Petland appears to be knowingly selling customers puppies sick with deadly communicable diseases regularly.

Then there’s Ronald Gorney who said he bought a seemingly new headboard from Wayfair only to wake to dozens of “blood-fattened bed bugs” “scurrying about” and “crawling about the inside of the bed where he previously lay.” Gorney, understandably, decided to dig a little deeper into Wayfair. Sure enough, others had taken to PissedConsumer.com to complain and warn of “reviews upon reviews” covering Wayfair’s bedbug blight. Gorney attempted to start a class action (where the aggrieved consumers would join together to sue WayFair), but Wayfair cited an arbitration clause in a 4,500-word disclaimer located under its “Place your order” button online. There would be no justice for Gorney. Gorney alleges that Wayfair, however, has sent him a 10 percent off coupon. The company has also happily claimed it has, “resolved nearly every bedbug complaint” brought to its attention.

Forced arbitration has been used to enable some terrible behavior, including nursing homes abusing the elderly with impunity. And employees at Wells Fargo fraudulently signing millions of customers up for credit cards and bank accounts (without their permission) and the company (outrageously) arguing that customers cannot sue under arbitration terms written into the illegally created accounts. Then there’s the very recent example of Chase Bank forcing thousands of credit card holders into arbitration (unless they just so happened to see Chase’s email announcing the new terms and have the time to snail mail the bank an opt-out notice within the next month).

If you don’t like making deals with the devil, it’s time to demand a stop to forced arbitration. Fortunately, Congress is considering passing a major piece of legislation that would end the practice and restore our right to justice—the Forced Arbitration Injustice Repeal (FAIR) Act. Big corporations, however, are banking on consumers being kept in the dark. Let your member of Congress know that this time you’ve “read the fine print,” and you support the FAIR Act.

Lauren Hall is National Policy Advocate at Consumer Action.