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Congress Investigates Carriers' Debt Collections
Julie188 writes "'Tis the season for the government to crack down on abusive practices by your secretly evil national wireless carrier. Next up: a congressional committee will be looking into a debt collection practice that prevents customers from filing lawsuits. Rep. Dennis Kucinich (D-OH) will be examining a contract clause that forces customers to waive their right to sue and instead agree to forced arbitration. He is hot on the tails of the carriers after a similar investigation of credit card companies lead to nine banks removing the forced arbitration clause from their contracts. This follows the week's earlier news that the FCC was going to try to come up with new rules to prevent wireless bill shock."
I think Dennis Kucinich is someone that can be trusted to look after the people instead of pandering to business.
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At least this shows congress doesn't deepthroat the corporations dicks They just go halfway in
Tis the season for the government to crack down on abusive practices by your secretly evil national wireless carrier
That is the worst kept secret EVER. They are all evil, every last one of them, and if you don't know this by now then you must not have ever had a cellphone before.
When did this become a business methods and government regulation discussion site? Debt collection practices by monopolies is not a technology discussion.
Every mans' island needs an ocean; choose your ocean carefully.
They should ban forced arbitration clauses in any one-sided contract including credit cards, telecommunications service, cable service and utility service.
Forced arbitration is f*cking everywhere. Can we have it removed from employment contacts next?
And having worked for the mobile phone company that has said forced arbitration, that was the favorite cause to beat customers around with when they say lawsuit. Not that anyone in customer care actually had any idea what the difference was between a lawsuit and arbitration was, just that 'we win automatically.'
That would be home made Kombucha.
People got so illeterate they cannot read/understand a contract before signing it.
Tomorrow is another day...
Cell phones and mobile networks are technology. They are some of the most complicated consumer technology we have today, in fact. Anything and everything relating to such technology is surely fair game here at Slashdot, even if it involves the companies who provide the technology, or the consumers who use it. After all, they're the ones who drive the technological developments.
Arbitration is essentially a system of parallel, private courts run by corporations, for corporations and for the express purpose of denying justice and avoiding the laws of the land. It's an absolutely corrupt system and should not be allowed to exist in any form whatsoever. Allowing seemingly innocuous instances of this practice has lead to private companies forcing rape victims to give up their rights. Corporation employees can abuse people in any way they please and can rely on their own private courts to avoid any reprecussions. Judges support this creeping privatisation of the judiciary as they are rewarded with handsome salaries as the private magistrates of these twisted courts.
Around the time of the Jamie Leigh Jones rape arbitration scandal, I remember speaking with someone in management about arbitration--I live in Ireland. He claimed that the trend in business--magazines, conferences and so on--was pushing arbitration heavily. As the "modern" way of doing business. The conversation sent a chill down my spine. The laws of my country and the people in it were being put in dire jeopardy, our legal protections being replaced right under our noses by this latest innovation in American savagery. At least I live in the EU; I can only imagine what must be occurring in Latin America or indeed the US itself.
Arbitration is lawlessness. It is rule by the powerful over the weak. It's not even a form of order, as arbitration courts have no strict rules, no obligation to consider precedent, no means of appeal, and are not even obliged to publish their rulings, let alone have an open court. The North Koreans have a more enlightened legal system--and again that is not hyperbole. Any society that accepts the rule of such courts has abandoned all pretence of justice and equality and has turned the clock back a thousand years before even the Magna Carta. And no other society should follow them down the path to ruin.
May the Maths Be with you!
Funny thing happened when I was buying my house, and went to my lawyer's office to sign all the paperwork. I was reading each of the 8 or 12 (don't remember anymore) documents that were several pages long when he made it clear; he didn't want me to do that. It was taking up too much of his valuable time. So I signed them all from that point on and just took his explanation for what they were. (I'm guessing this is the same guy that might say things like "you signed a contract you didn't read!")
I'm assuming you read (and understand) your cell phone contract. I actually did and I saw the part where no law suit could be filed - only arbitration. I natuarally assumed I could go to a comsumer group somewhere if I really had an issue. Probably not true, but I calm myself by believing it - otherwise I wouldn't have a cell phone. Hvae you read that contract? It's so one sided it isn't funny.
I'm one of those weirdo's who things the government should own infrastructure items (like airports and railway lines etc.) and private industry should pay lease fees to use them as part of their business model. Pretty crazy I know, but I believe it would open the door to more/better competition.
Crazy me.
Ok, I'm going to shut up now.
There's nothing inherently wrong with mandatory arbitration -- it is a cheaper way to resolve a dispute than going to court. However, like all decisions, even one made by a judge or jury, the decisionmakers have inbuilt biases and/or philosophies (I have no desire to argue over semantics, thank you very much).
The problem with mass arbitration is that the ordinally sensible rules of arbitration are susceptible to gamesmanship, and the repeat player, i.e., in these cases the phone companies, have superior information that permits them to shift the odds of a favorable decision substantially towards them.
In normal binding arbitration, each side has some ability to shape the arbitrator by objecting to the randomly assigned arbitrator (if there is a single arbitrator), or some of the members of the panel (if there is a panel of 3, the usual but less common alternative).
Joe Schmoe may have been to arbitration once before in his life. He has no reason to object to an arbitrator that he doesn't know from Adam. MegaCorp keeps records of all its arbitration results. It knows that Arbitrator X rules against it in some non-trivial percentage of the cases before him/her. It objects in the hope of pulling another Arbitrator who is more favorable to it. Arbitrator X does not get paid for being an arbitrator in that case. Lather, rinse, and repeat. On average, the panels can be shifted to be more favorable to MegaCorp by strategic objection (object if record is unfavorable, do not if record is favorable), and Arbitrator X is not making nearly as good of a living as Arbitrator Y because he/she keeps getting removed from potential arbitrations. Arbitrator Y is making a good living due to a good record. You do not need to assign 'evil' motives to Arbitrator Y -- the pool of arbitrators will naturally enrich with those who are philosophically favorable to MegaCorp.
And that, my friends, is why one never ever agrees to binding arbitration involving a repeat player who is permitted to object without cause. Of course, if you are facing a take-it-or-leave-it situation where the practice pervades an entire industry, then you need to turn to those dirty interventionist liberals (says the generally libertarian lawyer -- individuals have liberties, corporations not so much).
Supreme Court in Armendariz court decided if the contract is procedurally and substantively unconscionable that it could be voided. For it to be procedurally unconscionable the contract is one of adhesion, were one sides superior bargaining power dictates all the rules, and the other party is denied any negotiation power. Substantively when the terms are so one sided they are shock to the conscience. The problem I see here, is that one is not required to enter into the contract, and at any time could remove themselves from the negotiation and go with another carrier. In fact customers have choice to shop around and look around for deals. Though it is based on a sliding scale, where one does not need to rise to a level, while the other one beyond conscionability
Maybe I don't want to pay higher phone bills to cover the costs of lawsuits from other customers.
Arbitration is less expensive, and more predictable as you're not throwing things in front of juries all the time. That's not to say it hasn't been abused, but how about tweaking the process a bit instead of tossing it completely?
Maybe you can have forced arbitration, but the customer gets to choose the arbiter, the company pays for the arbitrator, and the customer can still bring a lawyer if they want to?
Also make forced arbitration not applicable to class action suits and allow for judicial review, by a judge, but with some deference to the arbitration decision.
paintball
Here and Here
The problem is that the Federal Government did not do anything to get arbitration removed by Credit Card issuing banks.
What happened was that the banks used an organization called NAF which was literally funded by the banks. Of course NAF found for the banks 99% of the time. Then the MN Attorney General looking to make a name for herself took NAF to task and NAF folded. That left 2 arbitration forums that were more expensive for the banks and more consumer friendly than NAF.
Some consumers actually read their contract and when they were brought to court for not paying their debts, used the contract against the banks to force the banks into paying 5-figure arbitration fees for 4-figure debts. The court judges in some states started to go along with the consumers. Hence, the banks removed arbitration from their contracts because they could not outright use it to screw over the customer anymore. Of course, the banks have a 98% success rate in court but that is because people do not answer the cases when summoned and even if they do answer, most answer "I cannot afford to pay".
Do a search on credit debt collection boards and you will find what I mean about the above.
So, since congress did not remove the arbitration clauses, why are they saying they did. Are they trying to turn this into something like the Providian case where they OCC entered at the last minute then turned around and said that state AGs cannot take banks to court for violations using that case as a success (again, look up Providian Credit Card Case)? I wonder if they are trying to protect the cell phone companies rather than the consumers.
TheMidget is the receiver at Goatse - don't click unless you really want to see him nekkid.
"Windows is like the faint smell of piss in a subway: it's there, and there's nothing you can do about it." - Charlie Br
Dennis Kucinich and Ron Paul. I saw them on television recently, discussing all the things they had in common.
How they are both fringe loonies that few people take very seriously? I've met Dennis Kucinich in person. Not a guy I'd vote for.
For example, both think the Federal Reserve (central bank) is a business monopoly that screws the customers by devaluing paper money...
A retarded notion. First off, only a tiny percentage of the money in the economy is actual paper/coin currency. We're talking single digit percentage. Second, the fed adjusts the amount of money in circulation both up and down to respond to the needs of the economy. Devaluing (usually called weakening) the currency is not necessarily bad because it makes exports more competitive. This is exactly what China has done with their currency - they hold it below its natural market value because it makes their exports cost less in other markets. Conversely, if you strengthen the dollar (take dollars out of circulation) you make imports cheaper but you hurt exports.
, and should be audited at least once per decade to find out where the money is being spent, and possibly dissolved.
While there are limits which are deserving of criticism, the Fed is regularly audited by the GAO. There are as we speak transparency laws and some (recently successful) lawsuits that should address some of these issues.
As for dissolving the Fed, you'll need to first address how you are going to resolve the issues that the Fed currently exists to handle including check clearing, being a lender of last resort, managing nation wide payment systems, balancing the interests of private for-profit banks with that of government, keeping reserve funds for the banking system, adjusting the money supply, providing liquidity to lending institutions, reducing the chance of and impact of bank runs, controlling systemic financial risk and more. While the Fed is hardly a perfect institution (far from it), it serves a number of vital purposes. I have yet to hear anyone who proposes eliminating the Federal Reserve System actually address in any detail a replacement system. Central banks exist for some very good reasons.
Forced arbitration is already unenforceable in provinces such BC and Ontario. Why don't they just bury in the contract that you forfeit your first born in the event of a dispute. Contract language needs limits, market forces alone are insufficient.
Normally the Constitution is taken to mean that a person maintains their rights even when they do not want those rights. The expectation of the right to trial by jury is normal. The notion that one can sign away one's right to the protections of the justice system holds no water at all and has only been tolerated because the big money players wanted it in place.The worm has turned.
Arbitration is a system for settling disputes easier, with less cost to parties involved, and less weight on the justice system. Doesn't mean it should be used for everything (or perhaps even for most things) but it is useful, and isn't an invention of companies. The government can use arbitrations too. Where I live, any traffic insurance suit under $25,000 goes to arbitration, not court. That is state law, not private companies saying anything. The reason is there's a lot of that little shit that happens. People get in an accident, the insurance of the person at fault pays all the costs, however someone wants more money, hires an ambulance chaser, waits till right before the statute of limitations is up and sues. That small shit gets remanded to arbitration so that a trial doesn't have to happen. It is just the clients, their lawyers, and an arbitrator, which is a neutral lawyer.
At the end of the fairly short proceeding (takes much less time then a trial) the arbitrator will decide how much is owed. If the defendant doesn't like that, they can demand a trial with no negative recourse. That is their right as per the constitution. However if the plaintiff doesn't like it, they can also demand a trial, but should they fail to secure an award larger than what the arbitrator gave by a non trivial amount (20% I believe) they are fined.
The whole point is just to keep costs down. A real trial requires a courtroom to be booked, a judge to be tied up, a jury to be selected, and so on. Arbitration just requires an arbitrator and a meeting in their office.
So I'm not saying it hasn't been abused, however this out and out hate for it is stupid. It is useful for things that don't need to go to court. The real problem is the concept of binding arbitration, saying that the results cannot be appealed to a court period.
Also please note that the KBR case is a bit of an oddity. The reason is that you are dealing with US personal in a country without much of a functioning justice system. That means that the company has to be relied upon to a large degree. In the US itself, this wouldn't be an issue. The rape complaint would be made to the police, who would investigate and prosecute as they saw fit. No agreement would matter, as it is the state itself that handles criminal prosecutions, and they have unquestionable jurisdiction. Also this wouldn't be an issue in a functioning foreign country, like say England. Again the complaint would go to the state (the Crown over there) and handled as a police matter. Doesn't matter if it was Americans involved, that the crime was committed on English soil would mean their courts would have jurisdiction.
The problem was that there was (and really is) no Iraqi justice system to go to. That's why KBR is involved and why the arbitration contract is involved. Not saying it is a good thing, just that you need to recognize it is an edge case, one the laws didn't consider since it is a rather new thing. Had she been raped by KBR employees while they were all in Texas, any agreement with KBR would be irrelevant, the Texas police and courts would investigate and prosecute the case.
So what does it cost to hire a lawyer that looks over these things? And how do you choose a good one? Word-of-mouth is not going to work since, as you say, most people don't get a lawyer to look over the contract.
"especially NOW when the econ is in the dumps, companies are trying to screw you over with your employment contract."
I'm a student so I don't know what kind of things to expect. What can they screw you over? Aside from non-competes that you mentioned.
"...you signed an indentured servant contract..."
Excuse me for my ignorance. Could you please be more detailed on the unenforceable things that they would demand?
This is the third 6-digit UID I've seen posting single sentences with Goatse goo.gl links... maybe someone is hacking /. accounts?
Do what thou wilt shall be the whole of the Law
It's not particularly useful to have an iPhone if you don't have a carrier.
Then explain the iPod touch and its App Store. What's the closest Android counterpart to iPod touch?
no one NEEDS cellphones, those are toys for the rich
Unless you're competing with a hundred other people for the same position, and your employer picked someone else because someone else picked up the phone for a callback after the callback to your number went to an answering machine.
Is forced arbitration bad if both sides have equal say in the arbitration process?
The sides rarely have equal say. For example, the larger party often reserves the right to choose the state in which arbitration happens.
If I'm recalling correctly, the federal 9th circuit struck down the binding arbitration clause of the contract in a suit against Verizon, stating that a cell phone contract is a contract of adhesion, and that one can not sign away their rights to legal recourse. I'm sure read this from a story linked from a /. front page post. I don't have the time to find this, but hopefully my post will jog someone's memory and they'll get a +5 comment for recalling it.
The whores get mad when the sluts give it away for free.