I Have a Terrific Deal On Mandatory Arbitration Clauses For You

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The CFPB has proposed a new rule that would prevent big companies from forcing their customers to accept mandatory arbitration in place of an actual trial in an actual court. Iain Murray is unhappy:

Like most of the CFPB’s rules, this may sound good at first hearing. In fact, it will be a disaster for the average consumer who enters into contracts like credit-card or mobile-phone service agreements….The inefficiency of the legal system has to be budgeted for, and so without arbitration, fees will go up and some people just won’t be offered a service at all.

….Those won’t be the only ways the consumer will suffer — those who are currently “denied their day in court” will as well. Because arbitration services are much cheaper, companies that use them generally pay all the fees for the consumer as well as their own. That’s not the case in court, where the consumer bears a considerable cost. If you are lucky enough to get a contract after this rule goes into effect, you’d better budget something for your day in court, because you’re going to have to lawyer up. Of course, there’s always the chance that you’ll be asked to participate in a class action lawsuit, which this rule is primarily designed to facilitate.

Fair enough. As it turns out, corporations all offered their services quite widely back in the dark ages before arbitration clauses, but it’s true that arbitration does indeed have some benefits. Still, we’re all free marketeers around here who believe in contracts freely arrived at without undue coercion. Right? So here’s what I propose: my bank and my cell phone company should offer me the choice of accepting arbitration or not when I first sign up. If I accept, they offer me a discount. The CFPB’s only role will be to ensure that the discount is reasonably in line with the actual cost savings from arbitration. Deal?

No? I guess there must be something else going on. I wonder what?

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what drives Mother Jones' team of 50-plus journalists. The truth is powerful, as evidenced by how hard those with something to hide, or profit to gain, seek to discredit it. The truth, stated boldly and reported meticulously, is what draws so many readers to Mother Jones.

And the truth is, going into the final 4 days of the year we still needed to raise $TK to hit our $350,000 goal and start 2021 on track. It's nerve-wracking, wondering if the big spike we normally see at the end of December is going to be another thing that doesn't go as planned in 2020, or worse, if, now that Donald Trump is set to leave the White House (for longer than a taxpayer-funded golf trip to a property he owns), folks might be pulling back from fighting for the truth and a democracy and think the hard work is done.

It's not, and if you can right now, please consider a year-end donation to support our team's fearless nonprofit journalism so we can close that big fundraising gap and finish the year strong, ready for all that's ahead in 2021. Whether you can give $5 or $500, it all matters in keeping us charging hard, and we'd be grateful.

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