GOM_LAW_Mandatory_Arbitration

How can Mandatory Arbitration Affect You as a Consumer?

Want create site? With Free visual composer you can do it easy.

Recently, there has been a significant amount of focus on recalled products. For those who may not know, a product is recalled if something is intrinsically wrong with its design. This could be something that impacts the ability of the product to function properly or, worse, something that could potentially lead to injuries to the user. When this happens, many people debate filing a lawsuit against the company. While there are pros and cons to each side of the matter, allowing consumers to file lawsuits against companies is not only a force for justice but also a force for change.

First, a Story from the Past

People may not remember this; however, Home Depot was breached by hackers in 2014, leading to the leakage of a significant amount of consumer data. This led to a significant amount of losses for banks who had a vested interest in Home Depot. This group of banks decided to band together and filed a class-action lawsuit against Home Depot. This class action lawsuit is common for banks and other companies; however, the consumers who had their data lost did not have the same choice. They are often barred from filing a lawsuit together against another company even if the company has wronged them and other people in some way.

Why is this an Issue?

When people agree to purchase a product or service, such as filing for a new credit card, there is often a mandatory arbitration clause in the contract that people are forced to sign. The vast majority of people may not even read this clause as they skip their way down to the signature line. When they sign, they are forgoing the legal right to file a class-action lawsuit. This means that anyone who desires to sue a company that has forced them to sign this contract will have to sue a company on their own. This often requires resources that people simply do not have.

A Powerful Example

Most people will remember the issues that Wells Fargo had in the recent past. They were opening up phony bank accounts for their customers in an effort to reach an arbitrary quota. This led to costs to their consumers that their customers had not previously agreed to. While the bank was penalized heavily, a group of consumers attempted to file a class-action lawsuit against the bank, alleging harm from the false accounts. While they were more than justified in doing so, the lawsuit was tossed by the courts because the customers had agreed to this mandatory arbitration clause when they signed their contract with Wells Fargo. They were not permitted to file a class-action lawsuit.

Better Served Alone?

While there has been a tremendous amount of debate at the government level swirling around whether or not consumers should be permitted to file a class-action lawsuit, the opponents of consumer class action lawsuits claim that people are better served by trying to act alone. This simply is not true. A research study found that people who file lawsuits as a group often receive more money than those who elect to file a lawsuit alone. This means that the benefits awarded to consumers on back side of a lawsuit are greater for those who file lawsuits together than individually.

A Deterrent to Harmful Behavior

Furthermore, group lawsuits are better to able affect change with poor company practices. Individual lawsuits, while still important, do not carry the same weight as class-action lawsuits filed by significantly more people. When large groups of people band together, more people tend to listen and the media also pays attention. In addition to the awards from lawsuits, large companies are often forced to change the practices that placed those consumers in harm’s way in the first place. For example, if a bank were to overcharge consumers on overdraft fees, a class-action lawsuit could highlight this practice and force every bank to end this practice before they got sued as well.

Choices are Important

Opponents of class-action lawsuits often argue that this will take away the choice of an individual to file a lawsuit alone. This is not the case. The point of a class-action lawsuit is to merely ensure that everyone has the option to file a class-action lawsuit if they so desire. Some people would be better served filing an individual lawsuit, particularly if their case was unique; however, there are other situations where the ability of an individual to file a class-action lawsuit with others could be beneficial to their case. They should have this ability to do so.

Not a Threat to the Banking System

Another individual also claims that if consumers are allowed to file a class-action lawsuit against banks, it would represent an end to the banking system. This is simply not the case. Even if the potential lawsuit awards cost the banking system $1 billion per year, banks bring in over $170 billion annually in profits, based on last year’s numbers. There is no way that lawsuits alone could bring an end to the entire banking system. Military service members and mortgages are also already prohibited from writing in the mandatory arbitration agreement. This would simply expand this to encompass the entire financial sector. Consumers deserve rights just as banks do.

Know Your Rights

The first step in changing the practice in this industry is to make sure that consumers know their rights. If a company has wronged an individual in some way, they deserve the opportunity to fight for justice in a court of law. Everyone should receive the compensation that they deserve and deserves the best representation available. When this happens, contact GOM Law, located in McAllen, TX, for more information. Their experienced attorneys are standing by and are prepared to help everyone. The first step is to educate clients about their rights to ensure that they know where they stand.

Did you find apk for android? You can find new Free Android Games and apps.

Related Posts

Leave A Reply