Forced Arbitration Clauses

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If you own a cell phone or a credit card (or many other devices/services in today’s modern world), you almost certainly agreed to a “forced arbitration clause.”

So what does that mean? It means that when your cell phone provider or credit card company overcharges you, underdelivers on what you agreed to, or otherwise wrongs you, you can’t take them to court. Instead, you forfeit your 7th amendment right to a jury trial and are forced to submit to a secret, binding tribunal where the company that wronged you picks the arbitrator.

Worse still, many forced arbitration clauses include a class action ban, which means you have to handle your small (but important!) claim all on your own. This all but ensures that no lawyer will be able to take your case.

There are a few things you can do to try to level the playing field:

1) Try to strike the arbitration clause from your contract. This will rarely work because the companies generally have you sign an adhesion contract, which is essentially a “take-it-or-leave-it” contract, meaning if you don’t like it, the company just won’t do business with you.

2) Beat the crooks at their own game by filing your case in small claims court. Force them to hire an expensive lawyer to kick your case out of small claims and into arbitration court. Often, this cost will exceed your claim’s value and the company will agree to resolve your case in court after all.

And that’s your shot of legal wellness for today. If you’d like to learn more, please subscribe!

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