Why Members of Congress File Joint Statement of Disapproval Over Consumer Protection Measure
Mandatory arbitration has been slowly taking the place of class action lawsuits, at the behest of major corporations and financial institutions. This makes sense: arbitration allows companies to address each individual complaint filed as a stand-alone incident, whereas in a class-action lawsuit, even consumers who cannot afford individual representation can seek recompense. Fewer consumers able to make complaints means less money paid out as settlements, which can add up to major savings for big companies. The Consumer Financial Protection Bureau has been investigating this trend for five years, and as a result of their research, has proposed a change to the mandatory arbitration clauses in most banking, finance, cell phone provider, online shopping and media sites, insurance policies, and even nursing home agreements to work cooperatively with others who may have the same issue with the same provider to seek justice. For those businesses that maintain arbitration clauses, the new rule would require the companies to take on the costs [...]