Which Worst Company Contenders Force Customers Into Mandatory Arbitration?

As we sifted through the mountain of nominations for this year’s Worst Company In America tournament, we noticed a trend of readers who cited companies’ mandatory binding arbitration clauses as a reason for nominating. And while it’s businesses like AT&T and Sony that have made all the headlines for effectively banning class action lawsuits, there are a lot of other WCIA contenders who are forcing customers into signing away their rights.

The folks at Public Citizen keep a Forced Arbitration Rogues Gallery on their website, and a number of the businesses listed there are also currently competing for 2012 Golden Poo.

In addition to AT&T — who got the binding arbitration snowball rolling last year by convincing the U.S. Supreme Court that one clause in its 42-page term customer agreement is sufficient to negate all class-action claims — and Sony, the other WCIA contenders in the Public Citizen round-up are:

* DirecTV
* Verizon
* Comcast
* Sprint
* Time Warner Cable
* Wells Fargo
* JPMorgan Chase (in the Rogues Gallery twice for consumer banking and student loans)
* Sallie Mae
* Citibank
* EA
* Ticketmaster
* Netflix

Public Citizen links to each of these companies’ terms of service so you can play detective and try to find the arbitration clauses among the rest of the stuff no one ever reads.

Forced Arbitration Rogues Gallery [Citizen.org]

Comments

Edit Your Comment

  1. dolemite says:

    Screw you AT&T, and your binding arbitration. I’m going to Verizon. Oh um…screw you Verizon, I’m going to…Sprint…well…erm….

  2. MichaelRyanSD says:

    I don’t get how this is legal, how can a company force you to waive your legal rights to do business with them. Likewise a lot of employers have this now when you work for them. Basically it means its an all access pass for them to do whatever the f they want to you, and you have no legal recourse?

    • Loias supports harsher punishments against corporations says:

      It’s legal because you have a choice in doing business with them.

      Not saying I agree with it in the slightest, but it is legal.

      What we need is for Congress to re-enforce our legal rights, such as ban banning mandatory arbitration, or at the very least forcing the entire arbitration system to not be so biased towards the company.

      • StarKillerX says:

        Not saying it isn’t, but I’m curious what your basing your opinion on that it’s biased toward the company?

        I ask because several people who rant and rave about it but not could even say they’ve ever heard of any results from binding arbitration, biased or otherwise, and a few got REAL pissed when I pointed out that their conclusion was a biased as they claim the arbitration is.

        Don’t get me wrong, it is likely that it will be biased toward the company, but all the claims of bias ring hollow without any evidence to back it up.

        • MichaelRyanSD says:

          I think the reason why people find it biased is because often times there is also a clause that says they (the company) choose the arbitrator.

        • Loias supports harsher punishments against corporations says:

          Because, as stated below, the company chooses AND pays for the arbitrator.

          The company that performs the arbitration is very much incentivized to side with the corporation, because a corporation will choose an arbitration company that saves them the most money, which is the company that most often sides with them. It’s inherently biased.

          The arbitrating company and the corporation should have no ties to them, including the choice or abitrator.

        • Blueskylaw says:

          IS ARBITRATION UNFAIR FOR CONSUMERS AND EMPLOYEES?

          Yes. The proof is in the numbers. A survey of arbitration decisions involving credit card customers and First USA Bank, then the nation’s second-largest credit card company, found that the company had prevailed in 99.6 percent of cases that went all the way to an arbitrator.[ii] A Public Citizen study of National Arbitration Forum (NAF) cases in California confirmed the pervasiveness of anti-consumer bias in arbitration, with big corporations winning before NAF arbitrators in 95 percent of claims involving California consumers.[iii] Similarly, in March 2008, the City of San Francisco filed a lawsuit against NAF for operating an “arbitration mill” that favored debt collectors after an investigation revealed that NAF arbitrators had ruled for California consumers in less than 0.2% of all cases (30 out of 18,075) heard from January 1, 2003 through March 31, 2007.[iv] These 30 victories only occurred in hearings where a consumer brought claims against a business; when companies brought claims against consumers, they were successful in hearings 100% of the time.

          Employees also fare terribly in arbitration with their employers. Data from the American Arbitration Association (AAA) show workers succeeding in 21.4 percent of all employment disputes between January 1, 2003 and December 31, 2007.[v] Moreover, when looking specifically at AAA opinions in workplace racial harassment arbitrations, the employee win rate was only 5.3 percent.[vi]

    • jspeciner says:

      Arbitration is legal recourse. As we learned from the case in CA, some states also allow small-claims to be argued in court, as opposed to arbitration regardless of contract stipulation. You just don’t have the ability to pursue legal recourse as a group, which I don’t think is a legal right to begin with. I’m not saying I agree with it, but it is what it is unless it can somehow be struck down as unconstitutional.

      • jspeciner says:

        I stand corrected, it’s AT&T’s agreement that allows for small-claims to be argued in court. I do believe that there are still a handful of states that allow this regardless.

      • limbodog says:

        Arbitration is not legal recourse. Arbitration is theater. The company chooses the arbitrator, and the arbitrator decides for the company. Very neat little deal.

        And it pisses me off that we have so little options in some of these cases. It’s not like there’s 30 companies providing some of those services, typically in one area there are 3.

    • Mr. Bill says:

      It’s because we got the best government money can buy.

    • maxamus2 says:

      Because no one is forcing you to use that company. If it were a monopoly that might be something different, but if you choose to buy something, you also get the terms.

  3. Grogey says:

    Oh, I cant sue you as a group? That’s ok ill sue you directly.

    Well wishful thinking I suppose.

    • Loias supports harsher punishments against corporations says:

      Mandatory Binding arbitration means you can’t sue, as a group or individually.

  4. thatfunkylady says:

    Am I the only one who misread “arbitration” as “abortion”? I haven’t even taken any cold medicine yet today, this is scary….

  5. deadandy says:

    Who is forcing anyone to do anything? You have a choice not to do business with that company.

    • mcgyver210 says:

      Since most all companies are going this route now days with services that are not really considered luxuries but are really considered necessities by the fact that tax payers are being forced into paying for cell phones for people on government assistance. This in effect means you are being forced to agree to giving up your rights to have a service that is needed.

      Now as I said there are other ways to combat Att & other businesses that actually can be better for you than any class action anyway. I personally usually opt out of class actions after the way we was screwed in the invidia settlement by IMO a very incompetent Judge.

  6. jspeciner says:

    So here’s my thing… When an arbitration clause is present it’s mutual, meaning that both parties are waiving their right to sue or seek a judgement. AT&T’s arbitration agreement and information specifically does not address the ability to convert the arbitration results to a judgement (which others do). So carry the 1 – if you stopped paying your bill (granted, AT&T will shut-off your service after a couple of months), or you didn’t pay your ETF if you left, AT&T literally has no true means to collect what you owe them through the legal system. They can send you to collections, and you will be hassled for a while, but they can never seek or obtain a judgement against you, which means that they can never lien or garnish anything. In reality, you would never HAVE TO pay them anything. 0.01% of people would probably ever purposefully go through that, but I find it interesting.

  7. mcgyver210 says:

    No big deal because the only ones that really benefit from most Class Actions are the Attorneys IMO. If I have a problem that needs court I will just go after these companies in Small Claims Court where they can’t control it as well.

  8. evilpete says:

    I had a lawyer recently that had a arbitration clause in his contract. I should have seen this as a warning , I fired him 2 months later for over billing.

  9. TheMansfieldMauler says:

    I had a friend who worked for Public Citizen for a while. He quit and they refused to give him his back pay. He had to sue them in small claims, and he won.

  10. evilpete says:

    I feel arbitration agreements would be more accepted it they were a choice, eg : a “check here” on the contract that gives you $5 off a month if you agree to mutual arbitration

  11. ancientone567 says:

    Some of these are not as bad as you might think. I just read two of them and AT&T says, “binding arbitration or small claims court” so you can use either. Still not good but not as bad as your thought before reading it. Golds gym just applies to gift cards. So WTF? Don’t ever buy gift cards, right?

    • sqlrob says:

      Yeah. Sony allows an opt-out (in writing, rather than online, unfortunately). As mentioned elsewhere, there’s still small claims for AT&T.

      MS doesn’t have either of those.

  12. DanKelley98 says:

    Its time for a consumer revolt with our conditions for the privilege of doing business with us.

  13. wadewood says:

    I’ve banked with Wells Fargo for over 20 years. They sent me notice in the mail at first of year about this force arbitration. I called and said I wanted to opt out. They said not possible. I said you are fired; now at Alliant Credit Union.

  14. Alliance to Restore the Republic of the United States of America says:

    Logical fallacy: “Arbitration is legal because you don’t have to do business with that company.”
    That’s like saying you know the company is a sham/scam/ripoff and not legitimate. AT&T, et. al are legitimate companies. Therefore there should be no expectation or allowance for illegal activities. The expectation is that the company will conduct itself legally. If they’re in business that means the government has allowed them to be, trusting it will comply with applicable laws. If that company then does something illegal it is liable for prosecution under criminal or civil law.

  15. Alliance to Restore the Republic of the United States of America says:

    Seems like the government is taking two positions on some things. Which is it?

    1. Cell phones are luxuries. Not everyone needs them. Therefore you don’t have to do business with those companies and therefore don’t deserve legal protections from them. Therefore binding arbitration is legal.

    2. Every citizen must have the ability to contact emergency services in the event of an emergency. Cell phones are a necessary for all citizens. Therefore cell phone jammers are illegal.

    Seems like the government is simply siding with business just to side with business.

  16. pythonspam says:

    My realtor’s company wanted me to sign an exclusive broker agreement and among the other stuff I objected to, Binding Mandatory Arbitration was buried on the next to last page in tiny print.
    More and more big companies will keep including these requirements unless we as consumers push back and refuse to do business with them.

  17. maxamus2 says:

    And I don’t know why anyone is FOR class action suits. Look at the history of class action suits. When won, people usually get a few pennies to a few dollars while the lawyers get millions.

    Small claims court is the only way to go IMO.