Monday's D3 Daily Action: Tell Representative Scott Tipton to leave the Arbitration Rule in Place before Tuesday's vote
The CFPB’s arbitration rule restores consumers’ ability to join together in court to hold banks and lenders accountable when they break the law.
Banks and lenders bury terms in the fine print to block consumers from challenging fraud or hidden fees in court. Instead, these “rip-off clauses” force harmed consumers to challenge large corporations one by one in arbitration – a secretive system designed to favor banks and lenders.
Known as forced arbitration, this practice deprives consumers of their constitutional right to an impartial judge or jury. Instead, banks choose a private arbitration firm to decide the dispute, and consumers have little opportunity to present evidence or appeal a bad decision.
Many rip-off clauses also bar consumers from talking about what happened to them, keeping corporate scams and fraud out of the public eye. Indeed, reports show Wells Fargo customers tried to sue the bank over fake accounts as far back as 2013. But customers were kicked out of court and unable to share their stories because of these fine-print provisions – while Wells Fargo knowingly profited from fraud for another three years.
Acting at the direction of Congress, the U.S. Consumer Financial Protection Bureau (CFPB) spent over three years conducting the most comprehensive study on arbitration ever done. The data revealed that just 25 consumers pursue arbitration claims of less than $1,000 each year, as the vast majority of Americans simply give up when forced into arbitration. The study also suggested that consumers lose in arbitration, even when they win. Only nine percent of consumers succeed in arbitration, and even those who win recover just 12 cents of every dollar claimed. In contrast, companies win 93 percent of the time, recovering 98 cents per dollar.
Following the study, the CFPB finalized a rule to restore customers’ ability to join together in court to hold banks and lenders accountable when they break the law and return transparency to arbitration by creating a public record of claims and outcomes.
Before Tuesday's vote, please call Representative Scott Tipton's Office and and tell him to keep the CFPB’s New Rip-off Clause Rule. Here's what you can say:
"The Consumer Financial Protection Bureau has acted on its congressional directive by finalizing a new rule to protect consumers from forced arbitration.
I am calling to ask that Representative Scott Tipton block any and all efforts to repeal this crucial protection to ensure consumers can enforce their rights and Wall Street can’t just enforce its will.
The data is abundantly clear that these rip-off clauses, buried in the fine print, cause serious harm to consumers, as well as the public interest. That’s why I believe you should support this critical new rule. Under the rule, consumers like me who get ripped off by corporations like Wells Fargo can hold banks accountable with class-action lawsuits."
Sign the Petition to Congress: Don’t Touch the Consumer Financial Protection Bureau’s New Arbitration Rule