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Just about everyone who has a credit card, cell phone or a job has likely agreed to use binding mandatory arbitration to resolve disputes.
But how many consumers actually use this process? Turns out, not many, according to a report released today by Public Citizen, the public-interest group founded by Ralph Nader.
And what are the odds that consumers win in arbitration? Slim.
Public Citizen reviewed 34,000 arbitration cases in California -- the only state that requires companies to publicly disclose details of arbitration cases -- and found the decks are stacked against consumers.
Public Citizen says:
The findings provide a snapshot of how arbitration traps consumers throughout the country in unfair, secret proceedings where for-profit arbitrators make the rules.
Here's National Arbitration Forum's response:
Consumer outcomes in arbitration are the same as in court. Every published study and all empirical data indicate consumers prevail at a rate that is greater than or equal to litigation, where similar subject matter is at issue.
Earlier this year, I wrote that the state Supreme Court decision ruled against the former Cingular Wireless, now AT&T, saying it couldn't enforce a waiver in contracts that prohibits customers from pursuing a class action.
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