*Whenever Consumers open a new credit account, borrow a loan or begin contract financial services, it’s a sure bet that there will be a lot of terms and requirements that appear in print so small one would need a magnifying glass to read it.
Others may become bewildered by the legal jargon embedded in these agreements. If you’ve had that kind of experience, keep reading.
Within all the fine print and legal nomenclature, you may very well have agreed – without knowing – to give up your right to sue. This practice known as ‘forced arbitration’ denies dissatisfied consumers the right to sue for suspected illegal financial services.
Instead consumers must take up their problems with a mediator who is selected and paid by the financial provider.
These arbitration clauses are often found in credit agreements for a wide range of services including mobile wireless, private student loans, credit cards and checking accounts.
If you think consumers deserve better, you have a lot of company. A newnational poll found that nearly two-thirds of likely voters – 63 percent – support reforming consumers’ rights to take legal action against banks and other financial service providers that break the law. After hearing arguments for and against consumers’ rights to sue, respondents were largely united across partisan lines.
The release of findings coincided with a July 6 floor action in the House of Representatives that decided a multi-agency appropriations bill.
full House vote had not yet been taken.Additionally, in 2010 and as part of the Dodd-Frank Wall Street Reform Act, Congress directed CFPB to conduct a study and provide a report on the use of pre-dispute arbitration clauses in consumer financial contracts.
was brought before Congress when it enacted the Military Lending Act.In preparation for the proposed rule, CFPB extensively studied the effects of forced arbitration.
Credit terms are seldom negotiable. Only in a few instances are consumers given a one-time chance to opt out of these terms;
From 2008-2012, 34 million consumers received a total of $2.2 billion in cash payments from $2.7 billion of gross relief in class actions; the balance of monies went to pay attorneys’ fees and litigation costs; and Without the option to join together in a class action, only 25 consumers with claims of less than $1,000 pursued arbitration annually.
The new consumer poll, commissioned jointly by the Center for Responsible Lending (CRL) and Americans for Financial Reform (AFR), was taken by Lake Research Partners and Chesapeake Beach Consulting.
“We are glad to see such clear bipartisan support for consumers’ right to come together to take on widespread abusive practices,” said Lisa Donner, Executive Director of Americans for Financial Reform.
“Any consumer who believes that the financial services they received were illegal,” said Mike Calhoun, CRL president, “deserves to have their day in court. Currently, many do not have that option.”
source:
Charlene Crowell
[email protected]
www.responsiblelending.org
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