Dangers of Forced Arbitration

Binding arbitration clauses are inescapable. They appear in all forms of consumer contracts, big and small. Virtually every time you use a credit card, join a gym, buy a car or use your cell phone you are giving up your legal rights. If you have a dispute with one of these companies, you are forced into a closed, costly, and tilted process without any appeal or public record.

Federal law limits what states can do to rein in the use of arbitration. But states have the power to ban mandatory binding arbitration in insurance contracts and improved disclosures. The insurance industry in Texas has shown time and time again its propensity for taking advantage of consumers. Getting rid of this system is one step toward leveling the playing field for policyholders and consumers.