If arbitration can be to the benefit of the consumer in general, the bridge is stacked against the consumer in an arbitration proceeding, so much so that a compromise clause can deal the fatal blow of a consumer with any practical way to also correct a clear violation of law. But there are at least two possible exceptions. The GFPB began its study in 2012, published preliminary results in December 2013 and released its final report in March 2015. The report of the CFPB arbitration study shows that mandatory arbitration is widespread in consumer financing contracts and that most contracts contain mandatory arbitration clauses in many areas of consumer financing. The CFPB study showed that credit card issuers representing 53% of the total credit card market contain mandatory arbitration clauses. For prepaid cards, which are generally used more by low-income people, 92 per cent of agreements contain binding arbitration clauses. For student loans, 86% of the largest private lenders use binding arbitration clauses. The study found that in California and Texas, more than 99 percent of payday loan contracts include mandatory arbitration. Even in current accounts, where usage is lower, banks and credit cards that use mandatory arbitration account for 44 per cent of insured deposits. In addition, the rate of use of mandatory arbitration in credit card contracts is likely to be temporarily reduced, as the settlement of an agreement and abuse of dominance action has forced four major banks to stop using mandatory arbitration for three and a half years. Although these banks did not resume mandatory arbitration at the time of the study, immediately after the end of the transaction, this would increase the utilization rate to more than 90 per cent for credit cards if they were reinstated by mandatory arbitration. viii.
Unacceptable location: If the arbitration agreement requires that all arbitration proceedings be conducted on an island in the central Pacific Ocean, it would probably have no effect. In a recent decision, a California judge refused to enforce Uber`s arbitration agreement on the grounds that it was unacceptable.63 Among the features that make the agreement unacceptable, the driver was required to pay half of the arbitration fee, creating a significant barrier for access for low-income drivers. While the agreement allowed drivers to: disconnect from the compromise clause within the first 30 days of signing for Uber, the language of the opt-out was buried in small print towards the end of a long contract, leading the judge to call it „illusory because it is illusory“ 64 Although the judge rejects the application of Uber`s arbitration agreements in 2013 and 2014. , the case is contested. In practice, Uber can easily reorganize the mandatory arbitration agreement to correct the specific deficiencies identified by the judge and thus make its arbitration agreement applicable. In the absence of general measures to combat mandatory arbitration, further progress has been made on specific restrictions. In 2009, Franken successfully amended the 2010 Annual Defence Appropriations Department to address the use of mandatory arbitration by defence companies. The concrete case that motivated the amendment concerned serious charges of sexual assault, harassment and discrimination against a Halliburton employee. The amendment to the franc prohibits any arms contractor with contracts over $1 million from applying a mandatory arbitration agreement in all cases involving Rights VII of the Civil Rights Act or unauthorized claims related to sexual assault or sexual harassment.
The modification of the franc is an essential restriction on the use of compulsory arbitration by defence firms, but it is limited to this sector and applies only to the limited rights specified in the amendment.