Posts Tagged ‘Consumer Financial Protection Bureau’

New Ruling Bans Using Arbitration Clauses To Bar Class Action Law Suits

By admin

Friday, July 14th, 2017

The Consumer Financial Protection Bureau on Monday issued a final rule banning companies from using arbitration clauses to bar consumers from filing class action lawsuits.

The Bureau said that mandatory arbitration clauses with class action litigation regulations stop consumers with similar problems from banding together against credit card companies and other lenders to dispute small fines and charges.    Individually many consumers think they are unable to pursue small-dollar disputes or do not think that the ultimate payout would be worth the trouble, allowing companies to wrong consumers with little consequence, the CFPB said.

“Arbitration clauses in contracts for products like bank accounts and credit cards make it nearly impossible for people to take companies to court when things go wrong,” CFPB Director Richard Cordray said in a statement.

While we at PR&A believe this is a step in the right direction we would like to see the ban widen to include arbitration clauses in general.     Forced arbitration is requires parties to resolve their conflict without a trial; by an arbitrator often chosen by the corporation, and the arbitrator’s decision is almost always impossible to appeal.    This process denies people their right to a fair hearing and often tips the scale towards the protection of the corporation.  We find this exceptionally problematic for our nursing home clients who often find themselves facing these clauses as part of their admission agreement.

For more information on the ruling please visit the site below:

https://www.law360.com/articles/942749/cfpb-rule-blocks-class-action-bans-in-arbitration-clauses