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Posted: 6:00 a.m. Friday, Dec. 14, 2012

More flaws in mandatory arbitration revealed

9 out of 10 people want to be part of choosing the arbitrator

By Clark Howard


I have long sounded like a broken record in the past while constantly repeating a refrain about the dangers of kangaroo court arbitrations imposed on us by corporate America.

Arbitration is set up by companies to take advantage of you. Sounds like just rhetoric to you? Consider this: Recent Congressional hearings found that companies actually use software programs to calculate how often an arbitration firm will rule in their favor and the dollar amount of each ruling.

If a certain arbitrator isn't up to snuff, they get fired. A company can then turn around and change the terms and conditions on customers before hiring a new arbitrator more likely to rule in their favor.

And get this, even if you win, you pay all of your legal fees and all of the bank or corporation's legal fees too!

Now the latest news is that a survey from the Pew Charitable Trust says 7 out of 10 of us don't want mandatory arbitration thrust on us. Moreover, 9 out of 10 people asked want the right to be part of choosing the arbitrator.

No dice, of course, from corporate America.

Of course, there are ways to fix this. This "scandal a day" approach may lead to reforms that come up with a more equitable approach. For starters, I believe that mandatory arbitration should be banned from all contracts between employers and employees and businesses and consumers.