This U.S. Regulator Wants to End Mandatory Arbitration for Consumers
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Having consumers renounce class action rights has been common since a 2011 Supreme Court ruling.
A U.S. consumer watchdog on Thursday proposed new rules to block credit card companies, banks, and other companies from forcing customers to waive their rights to join class action lawsuits and only settle disputes through arbitration.
The Consumer Financial Protection Bureau (CFPB) proposed barring financial firms from including fine print in contracts that mandates arbitration in the event of a dispute over products ranging from checking accounts to credit cards. The agency said the clauses prevent consumers who have been wronged from receiving justice and compensation through the courts.
U.S. businesses are expected to oppose the proposal and sue if it becomes final. They say arbitration is more efficient and helps avoid costly litigation, which they said rarely benefits the people filing suit.
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