Proposed Rule Would Allow Consumers to Sue Banks, Credit-Card Companies – Current mandatory arbitration clauses in contracts force customers into private negotiations to solve disputes, Wall Street Journal, by Yuka Hayashi and Christina Rexrode.
The Consumer Financial Protection Bureau proposed a rule on Thursday restricting the use of mandatory arbitration clauses in consumer financial contracts. Financial companies used these mandatory arbitration clauses to restrict consumers’ rights to group a large number of similar complaints together into a class action lawsuit.
Jacob Zamansky stated, “[t]his rule should be cheered by consumers . . . [i]t will shift the power to consumers to address fraud and rip-offs by companies….”
The article also presents recent survey results which reveal that most consumers were not even aware that such a restrictive arbitration clause was contained in their contracts, and an even greater percentage looked forward to having the right to participate in a class action lawsuit.