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The Fair Arbitration Now Coalition is encouraged by Bank of America’s decision to stop requiring its customers to resolve their disputes in the unfair system of forced arbitration. Forced arbitration clauses – which are buried in the fine print of everything from credit card terms and employee handbooks to nursing home admissions forms – eliminate consumers’ and employees’ access to the courts and require that they submit their disputes to a private system designed by corporations to favor their interests.
Bank of America says it is making this change in response to complaints from its customers. This confirms recent polling conducted by Lake Research, which found that 60 percent of Americans polled oppose forced arbitration. Bank of America has finally listened to its customers; however, thousands of other banks, private employers, nursing homes, auto dealers and deposit institutions are still using forced arbitration every day to deny consumers and employees a fair shake.
Bank of America’s decision follows last month’s lawsuit by the Minnesota Attorney General against the National Arbitration Forum (NAF), the largest arbitration company in the country, alleging that the NAF committed fraud and engaged in false advertising and deceptive practices by misrepresenting its neutrality and hiding its ties to the debt collection industry. The NAF quickly settled by agreeing to stop accepting all future consumer arbitrations.
These recent developments reinforce what many advocates of fair arbitration have known for a long time – that the system of forced arbitration is unfair to consumers and employees and allows corporations to escape accountability. Only Congress can protect all Americans by passing the Arbitration Fairness Act, a bill that would prohibit the enforcement of forced arbitration clauses in consumer, employment, and franchisee contracts.
Forced Arbitration in the News
Reuters via Chicago Tribune, May 3, 2013
States urge SEC to halt forced investor arbitrations
Reuters, April 30, 2013
Lawmakers urge U.S. SEC to bar forced Wall Street arbitration
Bankrate.com, May 1, 2013
Arbitration: Strategies for fighting it
InvestmentNews, April 21, 2013
Aguilar spot-on about mandatory arbitration
Reuters, April 16, 2013
U.S. SEC's Aguilar urges end to mandatory arbitration agreements
The New York Times, April 1, 2013
After Boom-Boom Room, Fresh Tactics to Fight Bias
Lubbock Avalanche-Journal, March 30, 2013
Hightower: Corporate kangaroo courts supplant our Seventh Amendment rights