AT&T Uses Forced Arbitration To Overcharge Customers, Senators Say (arstechnica.com)

An anonymous reader quotes a report from Ars Technica: Five Democratic US senators allege that AT&T's use of forced arbitration clauses has helped the company charge higher prices than the ones it advertises to customers. The senators pointed to a CBS News investigation that described "more than 4,000 complaints against AT&T and [subsidiary] DirecTV related to deals, promotions and overcharging in the past two years." But customers have little recourse because they are forced to settle disputes with AT&T in arbitration, according to Sen. Al Franken (D-Minn.), Richard Blumenthal (D-Conn.), Ron Wyden (D-Ore.), Patrick Leahy (D-Vt.), and Edward Markey (D-Mass.). "Forced arbitration provisions in telecommunications contracts erode Americans' ability to seek justice in the courts by forcing them into a privatized system that is inherently biased in favor of providers and which offers virtually no way to challenge a biased outcome," the senators wrote in a letter yesterday to AT&T CEO Randall Stephenson. "Forced arbitration requires consumers to sign away their constitutional right to hold providers accountable in court just to access modern-day essentials like mobile phone, Internet, and pay-TV services." Forced arbitration provisions such as AT&T's also "include a class action waiver; language which strips consumers of the right to band together with other consumers to challenge a provider's widespread wrongdoing," they wrote.

Comments

forced arbitration for consumers..

[gl4ss]

..is stupid to allow.

anyone knows that. only americans don't.

Re:forced arbitration for consumers..

[drinkypoo]

The americans who are allowing this to happen (politicians) have to be getting something out of it. The rest of us have little opportunity to avoid it.

Re:forced arbitration for consumers..

[TheGratefulNet]

a republican concept; deny regular people any rights, keep them in fear of big corps and slowly erode what little rights they have left.

BIG BUSINESS is all that matters to them.

and they forget that the other half of the population is NOT in the business ownership 'club' and does not benefit from the 'give the ruling class everything they ask for, and more shit.

did you notice only D's were fighting this?

no, both sides are not equally bad. not by a long shot.

Re:forced arbitration for consumers..

[BarbaraHudson]

..is stupid to allow.

anyone knows that. only americans don't.

Most civilized jurisdictions have provisions that don't allow onerous provisions in contracts of adhesion (basically, contracts where it's just take-it-or-leave-it, no possibility to negotiate terms that are one-sided in favour of the provider). Even without such provisions, such contracts are a clear violation of public policy. Except, I guess, in oligarchies like the USA of Today, where, not matter who you vote for, you lose, business wins.

Re:forced arbitration for consumers..

[jriding]

Why don't we try this. Vote out the politician that backs Big Corp. Then vote out the politicians that back Big Banks. Stop voting based on if there is a D or an R before their name.
Once the politicians realize that the R or D will not get them the votes they might start listening to US the People instead of wall street or big corp.

Instead the continue to divide and concur, and we all lose.
Until that happens wall street and big corp always win.

PS. Yes I understand this would require Dems to actually vote for Repubs and Repubs to vote for Dems.
Start voting the MAIN issues and stop worrying about the other stuff. Keep voting on each issue until we only have politicians that vote and decide laws for us not the elite.

Re:forced arbitration for consumers..

[Ann O'Nymous-Coward]

The US has the BEST government MONEY CAN BUY.

Re:forced arbitration for consumers..

[Solandri]

It's not a Republican concept. It's a freedom concept. People are free to make their own decisions.

Every purchase is a sale. Every sale is a purchase. Economic transactions are symmetric that way. You are exchanging money for satellite TV service. DirecTV is exchanging satellite TV service for money. They are free to set the terms under which they'll agree to pay you (with service). You are free to set the terms under which you'll agree to pay them (with money). If both of you can come to equitable terms, then the trade happens. If you can't agree, then no trade happens.

If you don't like the arbitration clause, it's real simple - don't agree to it. Tell them you won't be buying their service because they insist on arbitration, and walk away. Find someone selling a similar product who doesn't require arbitration. If every seller requires arbitration, then perhaps you should investigate why they're all requiring arbitration, instead of immediately making the knee-jerk reaction of prohibiting it because you don't like it. If "half of the population in the business ownership 'club'" is requiring arbitration, there's probably a good reason for it.

Only Democrats were fighting this because taking away people's freedom under the guise of "the government knows better" is an anathema to Republican principles. Republicans believe in letting people make their own decisions, so the bad ideas die (because fewer people agree to them) while the better ideas flourish. They don't even claim to know which are the bad or good ideas - they just believe in your right to discover them for yourself.

Remember, this isn't a court which concluded that AT&T used arbitration to overcharge customers. This is a group of Senators claiming it. (I'd actually agree with them when it comes to cable and Internet service. Those are frequently government-granted monopolies in this country so you don't have the ability to walk away from deals you don't like - there are no other sellers because the government has prohibited them. But satellite TV and mobile phone services have competitors you can go to if you don't like the terms offered.) The one area I'd agree with them is that DirecTV's advertising is deceptive. Those $50/mo offers are introductory prices, and after the first year the price jumps up to the regular price which is buried in the fine print and difficult to find. My cable company OTOH advertised the regular price directly underneath the introductory price - in a smaller non-bold font, but very easy to see so I knew quickly and exactly what I was getting into. But that falls under the jurisdiction of the FTC, not class action lawsuits.

Re: forced arbitration for consumers..

[AvitarX]

True, but it seems of the 5% of senators that care about this issue, 100% are democrats.

This leads me to believe that democrats are less on the hook here, and both parties are not actually the same.

Re:forced arbitration for consumers..

[guises]

Unfortunately, it's not politicians allowing this to happen. It's the Supreme court. Here, this is the most relevant decision. Though there are a set of decisions related to that.

... Is what I was going to say. Actually, I'm reading a little more on this and apparently it goes back to the Federal Arbitration Act of 1925, which allows for contractually-based forced arbitration. The recent rulings seem to be about extending this to class-action lawsuits. i.e.: AT&T is using the arbitration clause to not only force individuals into arbitration, but to preclude any class-action suits against them. Someone will hopefully correct me if I'm reading that wrong.

So I guess we could blame present day politicians for failing to get rid of a century-old law, but that seems kind of arbitrary. Maybe we should just point out that this law is a harmful one, and ask that it be removed without placing blame.

Enforcable?

[McGregorMortis]

There are many common contract clauses that courts have found to be unenforceable. Arbitration-only and class-action-blocking clauses both seem like prime candidates to be found unenforceable.

Is there any case law along those lines?

Re:Enforcable?

[orlanz]

There was a 2015 Supreme Court ruling* that specifically addressed this, with arbitration, involved DirectTV, and a DirectTV clause that said "except where overruled by State". They ruled that Federal Law overruled California's** AND thus the exception clause in DirectTV's contract!!!

When it comes to Telecoms it's been extremely rare in the past 30 years that the politicians don't favor big business. Telecoms hate state by state regulations... unless it protects them against competition.

We had a very brief stint with Mr Wheeler as FCC chair. But something he swam upstream for years against a Republican majority is being washed away in mere months under Ajit. With Republicans owning the government there is no chance the arbitration issues will get corrected. They are also working on gutting the Consumer Financial Protection Bureau which is the only other organization that can address the issues via the unfair consumer contracts angle. I guess consumer contracts will get far worse in the next 4-6 years before the pendulum swings back and gets to partially fix it.

* = http://www.latimes.com/busines...
** = States rights... I only need them for stuff my party doesn't like!

Their logo is the Death Star. What do you expect?

[enjar]

They alter the deal all the time, and you pray they don't alter it further.

Fix the damned court system...

[bradley13]

I'm sure that arbitration can be abused. However, until the US fixes its damned court system, companies have no choice but to insist on this.

Personal example: I used to run a small company that produced a niche ERP system. Our Swiss attorney told us: Whatever you do, never sell to a customer in the US." We made one exception. We sold the system to a small organization that was just determined it was what they needed. A few months later, for reasons we were not privy to, the company fired someone who was a major user of the system. So she goes to a lawyer, to sue us, because she lost her job. I mean, really, WTF?

The tort system is a lottery, and both lawyers and plaintiffs use it as one - hoping to strike it rich off the back of someone else. The lawyers are the ones to tell their clients "no, you don't have a case, go get a life". A lawyer who takes a frivolous case to court should be fined, and required to personally pay the other side's legal expenses.

Re:Essential?

[kilfarsnar]

Broadband internet, cable tv, and cellular service are not essential services. First world problems.

Seems appropriate. The United States is a first-world country, why wouldn't it have first-world problems? And yes, broadband Internet and cell phones are essentials in the modern world; cable TV not so much. Try working a professional job without them. Go ahead, tell the interviewer you don't have a cell phone or Internet in your home and see how they react. Just tell them when you'll be home to receive a call and that the rest of your correspondence will be by mail.

As society increases its capabilities and comes to rely on them, modern technology and equipment become essential for living and participating in society. But I'm guessing you already knew that.