Holiday Shoppers: Beware of the Fine Print

As consumers finish-up their holiday shopping – or if you are like me, you are just beginning it – it has come to light that there is one additional thing to consider when making a purchase.  On top of checking age recommendations on toys and comparison shopping to get the best price, consumers now also need to check the fine print.  Hidden in the fine print of some of the most popular products this holiday season are forced arbitration clauses that reduce Americans’ chances for justice by taking away their access to the court.

These forced arbitration clauses are stacked against consumers.  In the event of a dispute with a corporation, the clause states that a consumer cannot take their case to court but instead must have their complaint decided in a private arbitration forum.  The corporation often decides where this will take place and who the arbiter will be, leaving consumers with high fees and biased decision-makers.  Forced arbitration applies even if a consumer is seriously injured by a product or service and arbitration records are also often kept confidential – so the public will never find out the extent of a corporation’s wrongdoing. 
 
The recent Supreme Court decision in AT&T Mobility v. Concepcion has further empowered this practice by giving corporations a blueprint to draft forced arbitration clauses that leave consumers with practically no recourse and take away their ability to join together as a class.  Many different types of corporations from Starbucks to Sony have now started burying arbitration clauses in gift card agreements and software updates.  It was just announced yesterday that Microsoft is following in their footsteps.
 
Luke Plunkett with the blog Kotaku highlighted this new development:
It's one of 2011's more troubling, if less sexy developments: that of major publishers and platform holders finding ways to stop customers taking them to court if something goes wrong with their product or service.
 
Sony was the first company to introduce a "no sue" clause as part of its terms of service in September, and was swiftly followed by Electronic Arts. Now Microsoft and its Xbox 360 are in on the act.
 
As part of the new dashboard update rolling out worldwide today, the console comes with a new terms of service agreement that users must agree to. Most of it is standard stuff, until you get to section 18.1.4. Binding Arbitration.
Arbitration is both a valid and effective process when both parties willingly and knowingly agree to it, but too often corporations use these clauses as abusive weapons in employment contracts, nursing home agreements, credit card billing inserts, and health insurance plans to limit individual’s right to justice.
 
AAJ supports the Arbitration Fairness Act (S. 987 / H.R. 1873), which will protect consumers from abusive forced arbitration clauses. Sponsored by U.S. Sens. Al Franken (D-MN), Richard Blumenthal (D-CT) and U.S. Rep. Hank Johnson (D-GA), this legislation will ensure that the decision to arbitrate is truly voluntary and that the rights and remedies provided for by our judicial system are not waived under coercion.