Brown Fights to Bar Harmful Forced Arbitration Clauses

Following Equifax, Wells Fargo, Senator is Alerting Ohioans to Efforts to Deny Day in Court to Wronged Customers

WASHINGTON, D.C. –Today, U.S. Sen. Sherrod Brown (D-OH) hosted a news conference call alerting Ohioans to forced arbitration clauses used in the fine print of contacts by banks, nursing homes, for-profit colleges, payday lenders, and other organizations to deny customers access to the court system when they’ve been cheated or harmed. Brown has fought to ban forced arbitration clauses that deny Ohioans their day in court.

“Ohioans need to be alert to these clauses that are tucked into the fine print of contracts of all kinds – from nursing homes to for-profit colleges to credit cards – and that prevent Ohioans from seeking justice in court if the company cheats them,” said Brown. “It’s our job to protect the people we serve – not corporations trying to scam consumers.”

Current efforts to roll back protections for Ohioans against harmful forced arbitration clauses include:

Financial Services

In July, the House of Representatives voted to overturn the Consumer Financial Protection Bureau’s rule that would block banks and payday lenders from using so-called “forced arbitration” clauses to deny customers access to the court system when they’ve been cheated. The Consumer Protection Bureau’s rule would block financial institutions from using forced arbitration and guarantee consumers the right to their day in court.

Brown vowed a ‘hell of a fight’ against Congressional efforts to roll back the rule.

Wells Fargo has also used forced arbitration clauses to prevent defrauded customers from taking them to court over fake accounts that were brought to light last year. Brown is leading legislation in the Senate that would give defrauded Wells Fargo customers their day in court. 

Nursing Homes

In October 2016, the Obama Administration finalized a rule that would have protected nursing home patients by prohibiting long-term care facilities from including forced arbitration clauses in their contracts. This rule is currently under attack from the Trump Administration, which has proposed to reverse this rule, standing on the side of corporations against residents and their families who have faced a wide range of potential harms.

Brown was joined on the call by George Dutton from Mentor, whose wife experienced neglect and abuse in a nursing home. Mr. Dutton was unable to take legal action after his wife was mistreated due to the forced arbitration clause included in the nursing home contract.

These forced arbitration clauses need to be removed. It will improve the care of people in these institutions, if they can sue them for neglect and abuse,” said Mr. Dutton.

In August, Brown wrote to Centers for Medicare and Medicaid Services (CMS) Administrator Seema Verma, urging her to put the health and safety of nursing home residents first and allow those who have been wronged to seek justice in a court of law.

Education

Education Secretary Betsy Devos is also blocking a rule from taking effect that would protect students from mandatory arbitration clauses in college enrollment agreements, mostly utilized by for-profit colleges. While the rule was supposed to take effect in July, Secretary DeVos is restarting the negotiated rulemaking process.

In March, Brown reintroduced legislation, the Court Legal Access & Student Support (CLASS) Act to ensure that Ohio students defrauded by for-profit colleges can have their day in court. Forced arbitration clauses deny students the ability to hold for-profit colleges accountable for their misconduct.

Equifax Breach

Following a security breach earlier this month, Equifax initially included forced arbitration clauses in the terms of use agreement customers must sign in order to get free credit monitoring and identity theft services it is offering. At Brown’s urging, Equifax removed forced arbitration clauses from its credit monitoring and identity protection services offered to customers this week.

 

  

###