More Companies Turn To Mandatory Arbitration: CreditKarma, Redbox, Kitty Bed Maker

People in a wide variety of circumstances, from drivers signing up to work for Uber to senior citizens entering a nursing home, sign mandatory binding arbitration agreements. Two popular online services have recently started to require that customer disputes go to arbitration, and a reader sent along a product purchased online — a cat bed — that came with a arbitration agreement of its own.

Credit Karma is a site that lets you quickly check items on your credit report and an estimated credit score, which doesn’t charge for the privilege. however, now the company is requiring customers to agree to arbitration, and there doesn’t appear to be an opt-out period.

“If you don’t want to agree to these updates, you can choose to cancel your Credit Karma account and discontinue using our services before November 15,” the company says in an e-mail. “But we really hope that doesn’t happen!”

To their credit, the company is making the changes very clear, and even took the step of providing legalese-to-English translations for each section of the terms of service. For example, the arbitration section explains:

“A third party arbitrator will help us resolve any disputes we might have. This means that any dispute will be resolved outside of class-action litigation. Hopefully, disputes will never be an issue, but you should read this section carefully for details on how it works.”

Rental kiosk Redbox is also joining the arbitration party, but they do let customers opt out. You have until 30 days after the new rules go into effect on November 30 to opt out of the arbitration requirement and keep your right to file class actions and hold a jury trial if there’s any dispute between you and Redbox.

You have to do it in writing: simply write or type on a piece of paper that you wish to opt out of mandatory arbitration, and put it in the mail to:

Redbox Automated Retail, LLC
Attn: Legal, General Counsel,
1 Tower Lane, Suite 900, Oakbrook Terrace, IL 60181

Finally, reader T. bought this cool “Cat Shack” bed and snuggle palace for his cat.


When he opened the box, he found a cat bed, and this arbitration notice.


“Seriously?” he wrote. Yes, apparently they are very serious about not wanting your cat to sue.

Want more consumer news? Visit our parent organization, Consumer Reports, for the latest on scams, recalls, and other consumer issues.