Stacking the Deck, Part 2
Following up to yesterday's blog on unfair arbitration clauses, in today's Star Tribune there was an article about a Senate bill introduced by Sen. Franken, cosponsored by 15 other senators, designed to put an end to these stealth arbitration provisions. In the article the senator noted that these clauses are one-sided and effectively eliminate a person's right to sue. The United States Chamber of Commerce responded with the argument that such arbitration clauses really do the consumer a favor because the alternative is personal injury lawyers starting class actions in which the personal injury lawyers make a lot of money and the injured consumers make very little. While that's true, the present system with these stealth arbitration clauses is even worse. A simple example serves to prove this. Suppose you are consumer and your bank has ripped you off with illegal fees to the tune of some $30. Let's say the bank has 2 million customers that they have done this to. That means the bank ripped people off to the tune of some $60 million. These stealth arbitration clauses usually prevent injured customers from banding together as a class to get their money back, which means you would have to start your own arbitration proceeding to get $30. 99.999% of the population won't do that, and the banks know it. So under the present system the bank walks off with $6 million in stolen money. A class-action lawsuit would force the bank to give back the $6 million, and that's why they don't like them.