Bail Bondsman In Orlando Fl – Consumer advocates want class actions restored as legal remedy

Source     : DenverPost
By            : Aldo Svaldi – The Denver Post
Category : Bail Bondsman In Orlando, Bail Bondsman In Orlando Fl

Consumer advocates want class actions restored as legal remedy

Many bank, credit card and other financial contracts consumers sign contain clauses that mandate arbitration to resolve future disputes. But those clauses often contain language that prevents consumers from joining together to make their case, something the Consumer Financial Protection Bureau, or CFPB, wants to change. “Very few consumers are seeking relief individually. Consumers should be able to band together,” said CFPB director Richard Cordray at a field hearing held at the Colorado History Museum in Denver on Wednesday. Most financial disputes involve small dollar amounts, making it tougher for a single consumer to spend the resources needed to challenge practices that might be harming thousands of others, he said.

In March, the CFPB completed a three-year study of arbitration clauses and issued a 728-page report required by the Dodd-Frank Act. The CFPB doesn’t want arbitration clauses eliminated, but wants to ensure that consumers can act collectively to protect their legal rights if necessary. Arbitration clauses, long part of business contracts, have over the past two decades increasingly made their way into consumer agreements, where critics argue the balance of power is more lopsided. “For far too long, big banks and other financial service industry players have used secret and unfair ‘contract’ terms to avoid accountability and deny consumers their day in court,” said Ira Rheingold, executive director of the National Association of Consumer Advocates, a participant on the panel in Denver.

Most consumers aren’t aware they have signed their legal rights away, and are surprised to learn attorneys can’t or won’t help them, said Jose Vasquez, an attorney with Colorado Legal Services. Low-income consumers in particular are often the most vulnerable to unfair and even predatory agreements and financial vendors, he said. Because arbitration cases usually aren’t made public, firms have less of an incentive to rectify unfair and potentially illegal practices, especially if they are profitable. The CFPB wants access to arbitration files, and is considering making those public.

Supporters of the status quo argue that allowing class-action status would cause financial service providers to to drop arbitration clauses entirely, and add to the costs passed onto consumers. “The overwhelming majority of disputes are resolved informally,” said Alan Kaplinsky, a lawyer at Ballard Spahr who helped financial service firms draft and institute mandatory arbitration clauses. If not, arbitration is a faster and more affordable way to resolve disputes compared to funneling cases into an already overburdened court system, he argued.  Kaplinsky notes that even when cases to rise to class action status, most either get dropped or settled in favor the lead plaintiff without benefitting the larger class. He noted the CFPB has provided an effective forum for resolving more than half a million consumer complaints, and that it shouldn’t disparage arbitration but rather educate consumers on the process. “Tell consumers how to use their arbitration provisions,” he urged Cordray and others.

Read More : denverpost.com/business/ci_28936490/consumer-advocates-want-class-actions-restored-legal-remedy