Consumer Rights Wiki - User contributions [en]

Forced arbitration

2025-01-15T03:34:43Z

Kibbled Jive Elk Zoo:

Forced Arbitration is a practice in which businesses can require their customers to resolve disputes through arbitration, instead of a traditional court system. Per Wikipedia: "Arbitration is a formal method of dispute resolution involving a third party neutral who makes a binding decision."<ref>[[wikipedia:Arbitration#References|https://en.wikipedia.org/wiki/Arbitration]]</ref>

== How it Works ==
Businesses will typically add an arbitration clause to their Terms of Service or Terms of Use. This clause generally outlines how disputes are handled between the consumer and the business. A good example of a typical arbitration clause can be found in Instagram's Terms of Use, which, as of January 6th, 2025, is under Section 7.4 - How We Will Handle Disputes:<ref name=":0">https://web.archive.org/web/20250106102429/https://help.instagram.com/581066165581870/ (January 6th, 2025) Retrieved January 13th, 2025</ref><blockquote>"Except as provided below, you and we agree that any cause of action, legal claim, or dispute between you and us arising out of or related to these Terms or Instagram ("claim(s)") must be resolved by arbitration on an individual basis. Class actions and class arbitrations are not permitted; you and we may bring a claim only on your own behalf and cannot seek relief that would affect other Instagram users."</blockquote>Currently, in the United States, arbitration clauses such as this one are legal under the Federal Arbitration Act (FAA).<ref>https://www.govinfo.gov/content/pkg/USCODE-2019-title9/html/USCODE-2019-title9.htm</ref> However, efforts have been made to prohibit forced arbitration, most notably the Forced Arbitration Injustice Repeal (FAIR) Act of 2023.<ref>https://www.congress.gov/bill/118th-congress/senate-bill/1376</ref>

== Why It's a Problem ==

=== Revocation of Rights ===
The practice of Forced Arbitration is one that is designed to revoke the rights of the consumer. In this case, the consumer's right to sue or participate in a class action against a business. Instead, the consumer must work with an arbiter of the businesses' choosing behind closed doors to resolve claims, which is widely believed to result in biased outcomes.

=== Inconvenient Opt-out Procedure ===
Arbitration is often made inconvenient for users to opt-out of. Instead of giving users the option to do so at sign-up digitally, most businesses will require users to send a handwritten letter within 30 days of their sign-up to opt-out of arbitration. This type of opt-out clause can also be seen in Instagram's Terms of Use:<ref name=":0" /><blockquote>"You can opt out of this provision within 30 days of the date that you agreed to these Terms. To opt out, you must send your name, residence address, username, email address or phone number you use for your Instagram account, and a clear statement that you want to opt out of this arbitration agreement, and you must send them here:" [Address redacted]</blockquote>

This practice is similar to how gyms will often require members to travel to their location or send snail mail to cancel a membership, while an online system could easily be put in its place.

== Examples ==
Some examples of arbitration clauses in terms and conditions include:

Instagram Terms of Use - Section 7.4 - How We Will Handle Disputes<ref name=":0" />

Sony PlayStation Network Terms of Service - Section 14 - Binding Individual Arbitration<ref>https://web.archive.org/web/20241216114722/https://www.playstation.com/en-us/legal/psn-terms-of-service/ (December 16th, 2024) Retrieved January 13th, 2025</ref>

Ticketmaster Terms of Use - Section 17 - Mandatory Arbitration Agreement and Class Action Waiver<ref>[https://web.archive.org/web/20250105150022/https://help.ticketmaster.com/hc/en-us/articles/10468830739345-Terms-of-Use#section17 https://web.archive.org/web/20250105150022/https://help.ticketmaster.com/hc/en-us/articles/10468830739345-Terms-of-Use] (January 5th, 2025) Retrieved January 13th, 2025</ref>

In Section 27.1 of Zoom's Terms of Service, says "You and Zoom agree that any dispute or claim between you and Zoom arising out of or relating to this Agreement or the Services (a “Dispute”), including any related software, hardware, integrations, advertising or marketing communications, your account, or any aspects of your relationship or transactions with Zoom, will be resolved by binding arbitration, rather than in court." <ref>https://www.zoom.com/en/trust/terms/</ref>

== Sources ==
<references />

[[Category:Common Term]]

Tesla

2025-01-15T03:33:06Z

Kibbled Jive Elk Zoo:

Tesla is a company founded in 2003 and taken over by Elon Musk between then and 2008. Elon Musk has taken the company in radical directions since and started on a foot of trying to follow in Apple's, from a consumer protection standpoint, controversial steps with things like requiring subscriptions or just flat-out being a Tesla technician to fix 2012's Model S, and then going beyond that and truly waging war on consumers, whether it's the continued denial of adding Apple Carplay or Android Auto to their vehicles, putting an expiry date on their cars and leaving people woefully at the whims of Elon Musk choosing what can and can't be done with their vehicles; or making a $100,000 "utility" vehicle whose warranty is void by a simple carwash.

Ancestry.com

2025-01-15T03:24:04Z

Kibbled Jive Elk Zoo: /* Cancellation policy */

Genealogy company based in the US.

== Cancellation policy ==
May charge a cancellation fee for "Subscriptions Longer than a Month, Billed Monthly" if you do not cancel within the first 14 days: <ref>https://www.ancestry.com/c/legal/renewal-cancellation-terms</ref>

<blockquote>
Where offered, some subscriptions longer than a month may be eligible for monthly billing. Even though you will be billed monthly, you are committing to the entire length of your subscription (e.g. 6 months or 12 months).

...

(1) cancel immediately for a full refund of the first month’s fee and immediate loss of access, or (2) cancel effective at the end of the first month, subject to a cancellation fee. If you change from this type of subscription to a different type of subscription before the end of your subscription term, you will receive a prorated refund for the remainder of the current paid month, and you may be charged a cancellation fee. For subscriptions purchased on www.ancestry.com, cancellation fees are the lesser of (i) $25 USD for 6-month subscriptions or $50 USD for 12-month subscriptions (plus any applicable taxes) or (ii) the remaining cost of your subscription
</blockquote>
[https://web.archive.org/web/20240824032751/https://www.ancestry.com/offers/subscribe Ancestry's older price pages] showed an offer which was following these cancellation terms along with a citation showing the commitment, however since then this has been removed from the page.

== References ==
<references />

[[Category:anti-consumer]]