Arbitration Clauses

Buyer Beware of Arbitration Clauses!
When buying your next car or truck, read your paperwork carefully. Some car dealers and financiers are inserting an “Arbitration Clause” in the fine print and it can hurt your legal rights later. Right now, some Ford Credit, Chrysler Credit and other bank finance contracts include arbitration clauses. Many car dealers are doing it too.

Arbitration Clauses might take away your right to go to Court without you even knowing it!

For a consumer’s view on arbitration, click here.

Why is Binding Arbitration bad?
Arbitration is like playing cards with a stacked deck. The person who is going to decide what the manufacturer or dealer should do for you is usually paid by the manufacturer or dealer. When their paycheck depends on that repeat business from “big business”, your interests can take a back seat to fairness.

Worse yet, some arbitrations can make you pay if you lose and that could cost you more than if you were to just file a lawsuit in the first place. Click here to learn more.

What Can You Do?
Read the front and back sides of EVERYTHING carefully. If you see a binding Arbitration Clause, don’t sign it. Ask the salesperson why it’s there. If they are being honest in dealing with you, then why are they worried about having to explain themselves to a Jury in a Courtroom?

Draw a large “X” across the arbitration clause. Chances are the dealer will sell you the car anyway. After all, money is still what matters to them. But if the dealer still wants you to sign an arbitration clause, then go somewhere else.

What If I Already Signed an Arbitration Agreement?
You may still be able to pursue your legal rights in Court if any of the following exist:

1. The rules of the Arbitration require confidentiality.
2. The rules of the Arbitration do not allow you to file a class action.
3. The rules of the Arbitration require the Arbitration Panel or single Arbitrator to issue a decision without stating the reason for it.
4. The rules of the Arbitration require you to pay the costs of the Arbitration without telling you exactly what those costs will be.

There may also be other reasons why a car dealer cannot force you to go to arbitration.

Too many times, consumers are told by car dealers that they “must” go to arbitration when that may not be true. If a car dealer has told you that, you should be suspicious. Consult an attorney to find out what your legal rights are. You probably have more legal rights than you think.

Want More Information?
The Consumer Guide to Mandatory Arbitration Clauses. A thorough explanation from the Citizen Advocacy Center.

Mandatory Arbitration - Taking Away Big Rights With Small Print. The problems with arbitration summarized by ATLA.

The Arbitration Trap - How Consumers Pay for Low Cost Justice. Consumer Reports exposes the dangers of arbitration and how to protect yourself.

A consumer’s view on arbitration.

The Small Print that Devastates Major Rights. See what the National Consumer Law Center has to say about arbitration.

Auto Dealers and Consumers Agree: Arbitration is Unfair. Read the arguments that car dealers made to Congress about why they should be protected from arbitration in their contracts with car manufacturers. This article shows you why consumer’s arguments against arbitration are just as valid.

Auto Dealers Push to Arbitrate - Buyer Would Give Up Right to Lawsuit. Newspaper article reprinted by TLPJ.