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Sunday, November 1, 2015

In Which We Call Attention to the Fine Print

The other day, I received an unexpected check from Chase Bank for $6.70.  The timing was perfect, since, as it happens, I was exactly $6.70 over my monthly budget.  Were it not for this windfall, I would have lost everything--home, car, ability to buy food. . . . I would at the very least have had to forego my venti pumpkin spice until payday.  I kissed the check on the lips and vowed never again to put myself in such a precarious situation.

And good thing, too, because the class action lawsuit--the source of the above-mentioned corporate largesse--is becoming a thing of the past.  Today, more and more businesses, from banks and credit card companies to restaurants and adultery facilitation websites, slip disclaimers into the fine print of service contracts essentially barring consumers from filing class-action lawsuits.  Instead, potential customers must agree to resolve any disputes through binding arbitration--a fact these customers often discover only after suffering injury and seeking legal redress.

In principle, there is nothing wrong with arbitration--it can be an efficient way to settle disputes.  Problems arise, however, when the amounts at stake are too small to make it worthwhile for individuals to pursue arbitration on their own behalf.  Take my check, for example.  (Please don't literally take my check: Starvation!  Pumpkin spice withdrawal!)  I confess, I have no idea what this check was for: Presumably, Chase engaged in some shenanigans--shocking, I know!--and injured me and any number of other people to the tune of a few dollars each.  Now, even if I knew what Chase had done to me, and even if the actual financial harm done me was several times greater than $6.70--$25, $50, heck, maybe even $100--would I really go to the time (potentially months) and expense (potentially thousands of dollars), to try to recoup the money?  Not unless I was a fanatic or an idiot.

Yeah, shut up.

The point is, while class action suits result in relatively trivial victories for individual consumers, they also serve to punish and, ideally, deter corporate malfeasance.  My tiny check is just a fraction of what must have been a multi-million dollar settlement against Chase.  And maybe the memory of that settlement will dissuade Chase from. . . well, doing whatever they did to merit that punishment.  We can hope.

What is particularly noxious about these "pro-arbitration" (really just anti-class action) clauses is the arrogance of companies in thinking they could impose them in the first place.  What these clauses say, in so many words, is "We reserve the right to do whatever we want--legal or not--and we further declare that you can't do anything about it."  And the Supreme Court, because Scalia, somehow has no problem with this: "The antitrust laws do not guarantee an affordable procedural path to the vindication of every claim."  Or, as Elena Kagan wrote in her dissent, when consumers feel they have been wronged by arbitration clauses, the judicial response is, "Too darn bad."

So what can consumers do?  Not a whole lot.  Many of these fine-print contracts allow consumers to opt out of the arbitration clause, but consumers usually have a limited time in which to assert this right--and, of course, finding that provision requires the consumer to read through the whole eye-straining document.  Stories tell of one man--I think he lives somewhere in Minnesota--who managed to read through the entire Apple service agreement--but these tales are probably apocryphal.  No such man could truly exist.  Consumers can also, of course, opt not to patronize businesses that require arbitration, but with more and more companies employing this tactic, alternatives are limited, to say the least.

In the meantime, I'm debating whether to cash my check or just frame it. It may turn out to be a historical artifact of inordinate worth.  A relic of a time when consumers had some small power against corporate overlords.

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