Binding Arbitration Rules Get Consumer Protection Bureau Scrutiny
by Ann Carrns, New York Times
That’s because many financial accounts come with built-in contracts containing “pre-dispute” arbitration clauses — so-called because consumers agree to them when they sign up for the account, before they actually have a disagreement.
The federal Consumer Financial Protection Bureau on Tuesday released a study critical of such arbitration clauses, and suggested the agency may weigh new rules to limit them. The agency found that the clauses restrict consumers’ ability to file class-action lawsuits, in which many people with similar complaints file suit as a group, instead of individually. Tens of millions of consumers are subject to such contracts, which hamper their ability to seek financial redress, the agency found.
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