Big businesses have long argued that arbitration is cheaper and quicker than lawsuits for resolving disputes. That’s why they now force customers to waive their constitutional right to sue every time they get a credit card or buy a computer and submit to private arbitration for any future conflict resolution. Now comes the consumer group Public Citizen with a new report on how consumers actually fare when they face off with credit card companies, the major purveyor of arbitration agreements.
As it turns out, arbitration is almost never used to “resolve” a dispute. Instead, credit card companies are using arbitration as a sneaky and unaccountable way to collect debts from overextended customers, even when those customers have been the victim of identity theft or billing errors. In 34,000 cases Public Citizen reviewed, arbitrators (all hired by the credit card companies, of course) ruled against consumers 90 percent of the time, to the tune of $185 million.
Public Citizen’s most intriguing finding, though, was the case of arbitrator Joseph Nardulli, who, in a single day, resolved 68 cases—one every seven minutes— all in favor of the credit card companies who hired him. Now that’s swift justice!