Texas Watch

Forced Arbitration

Did you know that 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? It’s true.

Forced arbitration clauses have become ubiquitous in consumer contracts.  This means that 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.  Not only does binding arbitration have increased potential for bias against consumers, but it also contains numerous other pitfalls for consumers such as limited public accountability, higher costs for consumers, secrecy of proceedings, and loss of court procedures designed to produce an impartial and fair outcome.

At the state level, Texas legislators are limited by federal law in how they can rein in the use of binding mandatory arbitration.  However, they do have the power to ban mandatory binding arbitration in insurance contracts.  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.

Take action now to send a message to your legislators demanding that they ban binding arbitration in insurance consumer contracts in Texas, reducing the potential for further insurance industry abuse of policyholders.