Credit arbitration clauses favor corporations over consumers

Although arbitration is often associated with labor unions, millions of consumers are also affected by it and don’t even know it. Often consumers find the extremely small print of credit agreements difficult to read. Others become bewildered by the legal jargon embedded in these clauses.
In either case, consumers should take note. The old adage, “the devil is in the details” still holds true.
A new report released by the Consumer Financial Protection Bureau found that more than three in four consumers surveyed did not know whether they were subject to a credit arbitration clause. Checking accounts, credit cards, mobile wireless providers, payday loans and prepaid cards were the six financial markets that CFPB analyzed.
Even worse, CFPB determined that despite arbitration clauses dominant presence in consumer credit agreements, the clauses work more in favor of corporations than consumers. All too often, credit terms are seldom negotiable.  Only in a few instances are consumers given a one-time chance to opt out of these terms. Additionally when disputes arise, consumers seldom choose the arbitrator and creditors typically pay for arbitration services.