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Consumer Rights: Is the Supreme CourtGetting It Right?
Apparently the phrase “The customer is always right,” means nothing to the United States Supreme Court.
A court decision earlier this month prohibits consumers from filing lawsuits to settle excessive fee disputes if their contracts contained an arbitration clause. Arbitration hearings are out-of-court settlements usually tipped in favor of the company, which hires its own arbiter.
Consumer watchdogs say the decision gives companies more firepower to impose unnecessary fees. And it takes away the consumer’s Constitutional right to a jury trial.
The arbitration clause will no doubt become a popular addition to every cell phone, credit card, bank and insurance contract we sign. And it’s one more way for corporations to keep the moneybags full.
Jury trials and class-action lawsuits are the only way consumers can battle America’s corporate titans in a fair fight. In arbitration, however, chopping Goliath down to David’s size is much tougher. In a jury trial, attorneys have the power to depose people under oath and obtain internal documents that can reveal fraud. Arbitration keeps this fraud hidden, away from public scrutiny, as millions of more dollars fatten the wallets of corporate executives.
Advocates of arbitration will say it’s needed to alleviate overwhelmed courts from frivolous lawsuits. If it weren’t for lawsuits corporations can get away with anything.
Take a case where Baron & Budd attorneys helped consumers collect on overdraft fees imposed by Bank of America. Our attorneys served on the plaintiffs’ steering committee in a class action lawsuit that negotiated a $410 million settlement with the bank. If it weren’t for the lawsuit Bank of America could still impose the same fees today.
Unfortunately, banks, credit card companies and cell phone carriers are getting away with similar outrageous fees. Banks have instituted fees for wire transfers and banking at tellers. Now they charge you if you want to leave. For $25, PNC bank tellers will let you close your account. That’s right, you pay them to walk away.
It became apparent that the tide began shifting against the consumer last year when the Supreme Court ruled in favor of AT&T in a class action lawsuit. In that case, Vincent and Liza Concepcion sued AT&T for deceptive advertising practices. The large cell phone carrier advertised discounted phones but charged sales tax on the full retail price. The Concepcions sued.
But AT&T’s contract called for an arbitration hearing and the Supreme Court ruled that the Concepcions had no right to file a class action.
These recent Supreme Court rulings only embolden corporations to continue taking advantage of loyal customers. Our justices need to take a stand for the consumer and put an end to the fee mongering.