FTC Reaffirms Consumer Right to Enforce Warranty Protections in Court:
Latest Government Agency to Uphold Right to Day in Court Rather than Forced Arbitration
(WASHINGTON) Consumers will still have their day in court if an auto dealer fails to honor a warranty under a recent decision by the Federal Trade Commission (FTC). Attorneys at the National Consumer Law Center (NCLC) and the National Association of Consumer Advocates (NACA) applauded the FTC’s decision to preserve rules under the Magnuson-Moss Warranty Act that prohibit merchants from forcing consumers into binding, forced arbitration. NCLC and NACA encouraged the Consumer Financial Protection Bureau (CFPB) to follow suit and ban the use of forced arbitration clauses in contracts for consumer financial products.
The decision is important for a number of reasons, including that arbitrators are often paid by businesses and thus have an incentive to rule in their favor. “Secret, unreviewable arbitration proceedings before arbitrators paid by industry could keep unsafe cars on the road and unsafe products in our homes,” said National Consumer Law Center attorney David Seligman.
The Magnuson-Moss Warranty Act ensures that consumers have the right to enforce warranties on consumer products. It also prohibits manufacturers from dodging their obligations under written warranties on the ground that a dealer, not the manufacturer, sold the product. The Act also includes many protections against warranties that appear to promise real protection but hide limitations in the fine print.
The Department of Defense, the National Labor Relations Board, and the Equal Employment Opportunity Commission have also recently concluded that forced arbitration is inconsistent with the rights of consumers and employees. “These agencies and the FTC have recognized that our most hard-fought legal protections are rendered toothless by the proliferation of forced arbitration clauses. Now it’s time for the Consumer Financial Protection Bureau to ban forced arbitration clauses for consumer financial products, too,” said NACA Legislative Director Ellen Taverna.
Under the Dodd-Frank Act, the CFPB has the authority to ban forced arbitration agreements covering consumer financial products under its jurisdiction. In March 2015, the CFPB published the final results of its two-part study, which showed that forced arbitration agreements prevent consumers from protecting themselves against corporate wrongdoing at the hands of banks, payday lenders, auto lenders, and others. Forced arbitration does not provide an alternative dispute resolution mechanism for consumers, but rather a “get-out-of-jail free” card for financial institutions that violate the law.
Since 1969, the nonprofit National Consumer Law Center® (NCLC®) has worked for consumer justice and economic security for low-income and other disadvantaged people, including older adults, in the U.S. through its expertise in policy analysis and advocacy, publications, litigation, expert witness services, and training.
The National Association of Consumer Advocates (NACA) is a nonprofit association of more than 1,500 consumer advocates and attorney members who represent hundreds of thousands of consumers victimized by fraudulent, abusive and predatory business practices. As an organization fully committed to promoting justice for consumers, NACA’s members and their clients are actively engaged in promoting a fair and open marketplace that forcefully protects the rights of consumers, particularly those of modest means.
From ConsumerAdvocates.org (National Association of Consumer Advocates):
I've been working for a year or so as a lead volunteer on the Education Committee for the National Association of Consumer Advocates. We're working to develop a comprehensive plan and curriculum for effective continuing legal education courses, so that we can have more attorneys representing more consumers with problems in the marketplace.
The corporate takeover of the US Supreme Court since 1980 has been breathtaking in its scope, producing decisions that ALWAYS increase corporate power at the expense of real people and that include bizarre results that can only be understood if you agree that working people -- regular Americans -- are second class citizens in their own country, with the wealthy and the incorporated entitled to all the first-class seats. Disgusting.
The insurance industry is the 600 pound gorilla of lobbying, throwing its weight around Salem and Washington DC in a constant drive for greater profits. In Oregon, the insurance industry is, for all intents and purposes, completely unregulated -- the Insurance Commission is less of a regulator than a handmaiden to the industry, allowing it to claim to be regulated while in actuality doing nothing to help Oregonians deal with uncaring insurance companies.
The solution is to bring insurance under the Oregon Unlawful Trade Practices Act, just like EVERY other business in Oregon. Call your representatives in Salem and tell them that the insurance industry shouldn't have a unique "get out of jail free" immunity that lets them mistreat people and profit from their misery.
Next week, I'm giving a class to the Consumer Law section of the Oregon Trial Lawyers Association on what consumers can do when they've been ripped off by an auto repair shop.
We need more reporters to be our modern Paul Reveres and to warn us about the anti-American rule being imposed on us with forced arbitration clauses hidden in "take it or leave it" contracts where you have no say and no choice. Full story at: http://www.ocregister.com/articles/arbitration-656044-arbitrator-lindemann.html
Warning to Veterans: Don't let a cash flow crisis cause you to let someone con you into trading your lifetime retirement pay or VA benefits for a lump sum now!
I got a disgusting pitch in the email the other day, asking me to guide veterans to the website for this outfit that buys up guaranteed payment streams at a big discount, essentially suckering people who need those payment streams over a lifetime out of their rights to payment in return for fast cash now.
Maybe the worst part is the focus on veterans, since veterans' retirement pay and benefits are protected from garnishment, but a big lump sum from some scammy lender is not. In other words, if you sign away your retirement pay or VA benefits to this outfit for ready cash now, when you get the check from them, it will NOT be exempt from garnishment the way your pay or benefits were.
And since people willing to trade lifetime benefits for cash now are usually in financial trouble -- or soon will be -- that matters a LOT.
I'll give the pitch below so you can see how scammy these people are, but I'll delete their name and URL because I don't want to lead any veterans to them -- quite the contrary.
I'm reaching out to you from [Scammy.org], a site dedicated to providing essential information on pensions and annuities. Today we give thanks to all of the brave men and women veterans who serve our country.
The only question I have is how these people sleep at night when their entire job is separating the gullible and the desperate from a secure, guaranteed, garnishment proof stream of income and profiting from doing so.
Tell FCC: Don't let debt collectors harass you on your cell phone, burning up your $$ cell phone minutes
With Your Help, NCLC is Fighting Robocalls to Cell Phones
John Gear is a Salem attorney in solo practice