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The Dangers of Binding Mandatory Arbitration (BMA) Clauses at Car Dealerships


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Position Papers

WHY GIVE AWAY YOUR RIGHTS?
By Remar Sutton
President, Consumer Task Force For Automotive Issues

No one likes lawsuits. But it is precisely the threat of a lawsuit that forces many car dealerships to settle claims brought by consumers and discourages bad dealership practices.

When you sign a binding mandatory arbitration clause (BMA), you are taking away that threat.

Normally, you are also giving away your rights to be part of any class action lawsuits against the dealer and at times even against the manufacturer.

Does giving away these rights hurt? You bet!

  • Let’s say you find out the dealer fraudulently charged you and thousands of other customers an extra five hundred dollars in fees. Individually, it makes no economic sense for you to sue the dealer, and arbitration will cost you more than 500 dollars. But as a group, it makes great economic sense for you to be part of a suit against the dealer.
  • Or what if you buy a lemon, and find out that thousands of other customers have complained to the manufacturer about the same vehicle? As an individual, its not economically sensible to sue or arbitrate. As a group, or “class,” it makes economic sense.

Learn more about these issues! Right here, we give you great links to position papers on binding mandatory arbitration by many of the leading consumer groups in the country. Read them, and then help us publicize this issue and this web site, Click here or send an email to Mail@GiveMeBackMyRights.com

For more information on mandatory binding arbitration clauses in auto contracts:

The arbitration trap: How consumers pay for 'low cost' justice
Consumer Reports discusses issues related to arbitration and what consumers can do to protect themselves.

Auto Dealers and Consumers Agree: Mandatory Arbitration is Unfair
Public Citizen takes the arguments that auto dealers made to Congress about why they should be protected from manufacturer's requirements for mandatory binding arbitration and shows how and why consumer arguments for the same protections are similar. At the end of this article, Public Citizen offers links to a number of other articles related to arbitration.

Automobile Dealers Push to Arbitrate: Buyer Would Give Up Right to Lawsuit
This article by Christopher Jensen of Newhouse News Services as printed in the Times-Picayune is reprinted by the Trial Lawyers for Public Justice. It quotes authorities and experts on both sides of the issue.

For more information about mandatory binding arbitration issues in other types of contracts such as employment, credit, telecommunications services, and insurance:

Consumer Due Process Protocol from the American Arbitration Association
The American Arbitration Association, one of the big three administrative agencies, processes arbitration cases in a number of areas including "finance, construction, labor and employment, insurance and technology." This document sets forth the standards this agency believes should be met in business-to-consumer arbitration clauses.

Fact Sheet: Mandatory Arbitration—Taking away big rights with small print
A summary of potential problems with mandatory arbitration from the Association of Trial Lawyers of America.

The Costs of Arbitration prepared by Public Citizen's Congress Watch, details the various potential costs of arbitration, shares case stories, and compares arbitration and court costs for similar cases.

Mandatory Arbitration Clauses: Undermining the Rights of Consumers, Employees, and Small Businesses from Public Citizen's Congress Watch describes several unique characteristics of mandatory arbitration that makes it harder to individuals to prevail in a dispute with a business.

Arbitration Q&A from Public Citizen's Congress Watch provides answers to questions such as: Isn't arbitration a cheaper alternative than filing suit in court?, Why do businesses use arbitration clauses?, and What are the differences between a judge and a private arbitrator hearing a case?

Consumer and Media Alert: The Small Print That's Devastating Major Consumer Rights
Most Consumers Never Even Notice "Mandatory Arbitration Clauses," Now Being Slipped Into Everything from Bills to Contracts
from the National Consumer Law Center describes the impacts of mandatory arbitration clauses on consumers.

Resolving Consumer Disputes: Mediation and Arbitration from the FTC describes mediation and voluntary arbitration in general.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Arbitration an All Contract

 

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The content for this site was developed and assembled by Remar Sutton & Associates
© 2004 Consumer Task Force for Automotive Issues
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