By Ellen Taverna, NACA's Legislative Director
Instead of the famous catchphrase “You’ve got mail!,” last week AOL customers received a troubling message from the email service provider that essentially said:“You’ve got no rights!” That’s because AOL updated its terms of service adding a forced arbitration clause in effect granting itself license to break the law.
Forced arbitration allows AOL to push customers whose rights may have been violated out of court and into a private, secretive arbitration proceeding. This potentially biased arbitration provider chosen by AOL is not required to follow the law, including rules of evidence, and the decision is almost impossible to appeal.
Perhaps what is most disturbing about AOL’s new terms is the ban of customers’ ability to join together in class actions against the company, which means that each person must take on AOL alone no matter how egregious it acts. AOL knows that arbitrating an individual claim is often impractical or too costly for its customers to pursue. According to Readwrite.com –“It's especially alarming that AOL is trying to bypass class-action lawsuits, given its history. AOL settled a class-action lawsuit for violating users' privacy by releasing search data last year. It's also faced lawsuits over billing practices and ads inserted into email footers.”
Unbeknownst to many consumers and workers, forced arbitration clauses and class action bans exist in the fine print of ordinary dealings that happen every day. You are subject to forced arbitration clauses when you purchase a cell phone or credit card, apply for an auto loan, start a new job, and even admit a loved one into a nursing home.
Unfortunately, the U.S. Supreme Court has made this bad situation even worse. Supreme Court decisions in AT&T Mobility v. Concepcion and American Express v. Italian Colors have limited Americans ability to challenge the legality of forced arbitration clauses. A recent report from the National Association of Consumer Advocates (NACA) and Public Citizen, titled “Cases That Would Have Been: Three Years After AT&T Mobility v. Concepcion, Claims of Corporate Wrongdoing Continue to Pile Up,” identifies 140 cases affecting thousands of consumers or workers over the past three years where a court enforced a forced arbitration clause and barred the claimants from participating in a class action.
AOL is now a part of the growing list of companies seeking to eliminate its customers’ rights. Earlier this year, Dropbox, an online file hosting service, started using forced arbitration, as did one of the world’s largest food companies, General Mills. Fortunately, customers of General Mills didn’t put up with it and spoke out against General Mills stealing their rights using social media like its Cheerios Facebook page. General Mills quickly bowed to public pressure, removed its forced arbitration clause, and apologized.
When consumers and workers make their voice heard loudly enough they can stop the unfair practice of forced arbitration.
What can you do today about forced arbitration?