Wednesday, March 18, 2015

CFPB Shows That Arbitration Doesn’t Work for Consumers

Lina Khan writes in The Washington Monthly, CFPB Shows That Arbitration Doesn’t Work for Consumers "As I reported last year in this magazine, companies use binding arbitration clauses to insulate themselves from lawsuits brought by workers and consumers. Thanks to a suite of recent Supreme Court decisions, corporations can now couple these arbitration clauses with class action bans, effectively eliminating courts as a means for ordinary Americans to hold corporations accountable under the law."

"CFPB’s data advances the argument that arbitration is a starkly inferior way for consumers to win appropriate relief when they’ve been wronged by financial institutions. It’s predicted the agency will likely propose a rule limiting mandatory arbitration clauses in these take-it-or-leave-it contracts, and this report will help its case."

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