Did You Get A Gadget For Christmas? It’s Time To Opt Out Of Mandatory Arbitration!

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Did You Get A Gadget For Christmas? It’s Time To Opt Out Of Mandatory Arbitration!

Image courtesy of Adam Fagen

Did you receive any fun gadgets as holiday gifts? If so, it’s time to check read over that user agreement most people usually ignore to see if you have signed away your legal rights, or if you still have a chance to protect your right to a day in court.

Look through that user agreement (or terms of service, or end user license agreement, or whatever the manufacturer chooses to call it) to see if there is an arbitration clause. Increasingly, the odds are that you’ll find one. This bit of legalese means you can’t sue the company in a court of law, and likely can’t join in any class action against the company.

Then see if there is an “opt-out” clause that gives you a limited window of time to tell the company you want to retain your right to sue the company.

Why should you opt out of arbitration? The process is a streamlined way of dealing with legal disputes, which can be preferable in some situations. When you’re a lone consumer and you have a dispute with a large company, the odds of arbitration working in your favor are not good.

The company can have a lot of say in how the arbitration process works, and where it will occur. For example, until recently Starbucks required that customers had to travel to Seattle to settle disputes over its gift/stored value cards unless the company agreed to meet elsewhere.

Arbitration results are kept private. There are situations where that’s an advantage, but it probably isn’t in consumer disputes. Other customers who might encounter the same problem after your case is resolved won’t know about your case or what the outcome was.

If you choose to use arbitration, that’s fine, but it should be your right to choose the venue that you prefer if you ever have a dispute with the company that made your product or the software that runs it.

How do you check for arbitration clauses or opt out? Let’s use Fitbit as an example: the fitness trackers were popular gifts this year, with the app needed to sync the devices reaching #1 in Apple’s App Store. The company’s Terms of Service page spells out the arbitration requirement and how to opt out.

You need to opt out of Fitbit’s mandatory binding arbitration within 30 days, and can do it just by sending an email. As we publish this on January 3, you still have time to opt out if you registered your Fitbit on or after December 3, 2016. That leaves the many fitness trackers given as Christmas gifts well within the window to opt out, which you can do by e-mailing legal@fitbit.com. Simply write, “I, [your first and last name], decline Fitbit’s arbitration agreement.”

This isn’t unique to Fitbit, as our regular readers know. Competitor Jawbone’s Up fitness tracker, for example, has the same policy. While you’re at it, check any other product you’ve purchased or subscription that you’ve signed up for recently. Lots of the agreements that we all scroll past on our way to register for a website or register a product or sign up for TV service have arbitration requirements, though there aren’t always opt-out clauses. Even pets aren’t immune. One of our readers submitted an arbitration notice that he received with a cat toy, since cats are apparently into litigation now.

While the class action system is flawed, right now we don’t have a better way for consumers to fight back when many people have been wronged in small ways. If a product you’ve purchased allows you to opt out of arbitration, take the opportunity to do so.