Many businesses, including financial institutions, require consumers to submit future disputes to mandatory binding arbitration as a necessary condition for doing business. They also typically prohibit class actions. This means that consumers have no choice but to pursue individual claims in arbitration (see also Chapter 12, Personal and Legal Rights - Mandatory Binding Arbitration policy as well as Class Action policy).
MANDATORY BINDING ARBITRATION: Policy
Ensuring effective access to redress
Consumers should have access to effective redress with adequate recovery. They should have the right to pursue their claims in court on an individual or class basis.
Pre-dispute mandatory binding arbitration and class action waivers should be prohibited.
Consumers should have the right to bring a private cause of action for treble damages.
State law should allow a minimum recovery of at least $2,000 per consumer for each offense, indexed for inflation.
A defendant should be required to pay a consumer’s attorneys’ fees and costs if the consumer prevails in the action.