Consumers angry with a bank, payday lender or credit card issuer may soon get their day in court, courtesy of a new Consumer Financial Protection Bureau proposal on forced arbitration.
"Arbitration" is one of those common fine-print terms that people gloss over, but that should give them pause.
"Consumers are signing away their rights," said Lauren Saunders, associate director of the National Consumer Law Center.
By entering a contract with an arbitration clause included — or just clicking "I agree to the terms and conditions" — consumers acknowledge that either they or the company they are doing business with can block court disputes in favor of having the problem handled by a nongovernmental third party (i.e., an arbitrator). In other words, arbitration clauses can prevent you from taking the company to court or joining a class-action lawsuit.