Debt settlement services, private student lenders and auto lenders use forced arbitration to avoid answering for allegations that their misconduct has harmed their customers, a new Public Citizen report (http://www.citizen.org/righting-a-financial-wrong-forced-arbitration-report) shows.
Public Citizen's report, "Righting a Financial Wrong," examines specific cases of consumers who were wronged by companies in these three areas, and their attempts to receive compensation in a court. Court documents in the cases show forced arbitration contract terms requiring consumers to resolve disputes in private arbitration, preventing consumers from seeking remedies against the companies in court.
"It's a problem when players in the financial service industry can use broad contract terms to restrict consumers from seeking remedies in court," said report author
A series of recent
Financial industry lawyers have publicly advised their clients that the elimination of class actions ? and impliedly, some corporate accountability - is possible through the use of a well-designed forced arbitration clause. Class actions are critical for consumers to obtain redress, because illegal fees and fraudulent charges common to the financial services sector often are too small to justify a consumer pursuing a case on her own, whether in court or arbitration.
In one case examined in the report, a consumer in
Public Citizen's report calls on the
The report is available at http://www.citizen.org/righting-a-financial-wrong-forced-arbitration-report.
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