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Congress Investigates Carriers' Debt Collections 134

Posted by Soulskill
from the voters-are-in-favor-of-kneecaps dept.
Julie188 writes "'Tis the season for the government to crack down on abusive practices by your secretly evil national wireless carrier. Next up: a congressional committee will be looking into a debt collection practice that prevents customers from filing lawsuits. Rep. Dennis Kucinich (D-OH) will be examining a contract clause that forces customers to waive their right to sue and instead agree to forced arbitration. He is hot on the tails of the carriers after a similar investigation of credit card companies lead to nine banks removing the forced arbitration clause from their contracts. This follows the week's earlier news that the FCC was going to try to come up with new rules to prevent wireless bill shock."
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Congress Investigates Carriers' Debt Collections

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  • by ciaran_o_riordan (662132) on Saturday October 16, 2010 @09:21AM (#33917036) Homepage

    I think Dennis Kucinich is someone that can be trusted to look after the people instead of pandering to business.

    • by bsDaemon (87307) on Saturday October 16, 2010 @09:26AM (#33917070)

      I heard he once told staffers of Nanci Pelosi and a pair of AIPAC lobbyists to get the hell out of his office and not come back. Word has it now he's denying it happened, but its the kind of thing he'd do, and really raised my estimation of him from that of cooky communist elf man to someone who also wants to tell AIPAC to go to hell.

      I met him once by accident, briefly. However, he had wondered off before I could ask him to be in a short video clip saying "they're always after me lucky charms." His ears are slightly more pointed in person than they are on TV.

      • by dkleinsc (563838) on Saturday October 16, 2010 @12:56PM (#33918364) Homepage

        He's no communist, and he's definitely not a kook. He's my congressman, and I've spoken with him at several public events. The thing is, he has throughout his career taken stands that upset the rich and powerful, so they often do their best to portray him as a kook.

        For instance, the most famous episode from early in his political career (as mayor of Cleveland) was refusing to sell Cleveland's municipal power company to the private company that controls most of Ohio's electricity market. The electric company's pals at the banks then threatened the city with default rather than rolling over the debt as they had been doing for decades. Dennis stood his ground, the banks made good on their threat, and Kucinich lost his reelection bid. But in the long run he saved residents and businesses in Cleveland millions of dollars in electric bills.

        His more recent exploits include:
          * Refusing to support the Patriot Act.
          * Refusing to support the wars in Iraq and Afghanistan. He consistantly votes against appropriations for those wars, and has been doing so since before they started.
          * Introducing articles of impeachment against both George W Bush and Dick Cheney.
          * Acting as one of the leaders of the backbencher holdouts for a public option in the health care reform bill. Unfortunately, Obama was able to convince him that HCR without a public option was better than no HCR, so he eventually voted for it.

        The Democratic leadership doesn't give a damn what he does, though, because he's not good at getting oodles of lobbyist dollars (gee, I wonder why). So when he was running for President in 2008, the questions he got during debates were about whether he'd seen a UFO, not about his plans for reforming health care without mandating that everyone buy insurance.

        • Yeah, Dennis rocks. A few more like him and we would actually have representative government. Go Dennis!

    • by commodore64_love (1445365) on Saturday October 16, 2010 @10:17AM (#33917340) Journal

      >>>Dennis Kucinich is someone that can be trusted to look after the people instead of pandering to business.

      Dennis Kucinich and Ron Paul. I saw them on television recently, discussing all the things they had in common. For example, both think the Federal Reserve (central bank) is a business monopoly that screws the customers by devaluing paper money, and should be audited at least once per decade to find out where the money is being spent, and possibly dissolved.

      BTW binding arbitration doesn't mean much. Paypal tried to include that in their TOS but when they later were sued by State AGs for stealing money from customer accounts, the justice quickly nullified the clause as being in violation of consumer protection laws. He said that users cannot sign-away rights already protected by superior laws. Same applies here with the wireless carriers.

      • The Fed (Score:4, Informative)

        by sjbe (173966) on Saturday October 16, 2010 @11:17AM (#33917728)

        Dennis Kucinich and Ron Paul. I saw them on television recently, discussing all the things they had in common.

        How they are both fringe loonies that few people take very seriously? I've met Dennis Kucinich in person. Not a guy I'd vote for.

        For example, both think the Federal Reserve (central bank) is a business monopoly that screws the customers by devaluing paper money...

        A retarded notion. First off, only a tiny percentage of the money in the economy is actual paper/coin currency. We're talking single digit percentage. Second, the fed adjusts the amount of money in circulation both up and down to respond to the needs of the economy. Devaluing (usually called weakening) the currency is not necessarily bad because it makes exports more competitive. This is exactly what China has done with their currency - they hold it below its natural market value because it makes their exports cost less in other markets. Conversely, if you strengthen the dollar (take dollars out of circulation) you make imports cheaper but you hurt exports.

        , and should be audited at least once per decade to find out where the money is being spent, and possibly dissolved.

        While there are limits which are deserving of criticism, the Fed is regularly audited by the GAO. There are as we speak transparency laws and some (recently successful) lawsuits that should address some of these issues.

        As for dissolving the Fed, you'll need to first address how you are going to resolve the issues that the Fed currently exists to handle including check clearing, being a lender of last resort, managing nation wide payment systems, balancing the interests of private for-profit banks with that of government, keeping reserve funds for the banking system, adjusting the money supply, providing liquidity to lending institutions, reducing the chance of and impact of bank runs, controlling systemic financial risk and more. While the Fed is hardly a perfect institution (far from it), it serves a number of vital purposes. I have yet to hear anyone who proposes eliminating the Federal Reserve System actually address in any detail a replacement system. Central banks exist for some very good reasons.

        • >>>Not a guy I'd vote for.

          So who did you vote for? Bush? Obama?
          .

          >>>only a tiny percentage of the money in the economy is actual paper/coin currency.

          Uh. Irrelevant to the point. The point is the money, whether paper or numbers in a computer, is easily devalued because it's fiat currency. If a candybar cost 1 penny in 1910, and now costs about a dollar for the Same candybar, it's obvious the money has been devalued to 1/100th its previous value.

          Put another way, if my grandfather had own

          • Re:The Fed (Score:4, Informative)

            by cob666 (656740) on Saturday October 16, 2010 @12:59PM (#33918388) Homepage

            If a candybar cost 1 penny in 1910, and now costs about a dollar for the Same candybar, it's obvious the money has been devalued to 1/100th its previous value.

            You're confusing devaluation with inflation.

            • Re: (Score:2, Insightful)

              >>>You're confusing devaluation with inflation.

              They are two sides of the same coin. Like addition and subtraction. Or multiplication and division. What you call "inflation" is CAUSED by devaluation of the fait currency, because the Central Bank increased they money supply by approximately 100 fold.

              Put another way: If they had held the money supply constant, as they did in the 1800s, then a candybar would still cost just 1 penny. A man's business suit would still be just $5. And so on.

              • Re: (Score:3, Insightful)

                by vux984 (928602)

                Put another way: If they had held the money supply constant, as they did in the 1800s, then a candybar would still cost just 1 penny. A man's business suit would still be just $5. And so on.

                If they'd held the money supply constant, things would be pretty out of whack by now simply due to the population expansion.

                76 million people in 1900 with all the currency distributed amongst them... 300+ million people now... that means the currency is going to be distributed a lot more thinly... better hope a business

                • >>>currency is going to be distributed a lot more thinly..

                  I have no idea what you're talking about. You think people benefit because now they have to spend $500 to get a business suit instead of the $5 it cost in 1910? Or ~$200/week on food instead of the ~$2 it used to cost? If you do think that's beneficial, then you're no better than the corporations.

                  • Re:The Fed (Score:4, Insightful)

                    by vux984 (928602) on Saturday October 16, 2010 @04:23PM (#33919674)

                    I have no idea what you're talking about

                    Its simple. If you hold the money supply constant while the population quadruples you create a currency shortage. No different than if you held anything else constant... housing for example.

                    Bottom line, you can't hold currency constant.

                    You think people benefit because now they have to spend $500 to get a business suit instead of the $5 it cost in 1910? Or ~$200/week on food instead of the ~$2 it used to cost? If you do think that's beneficial, then you're no better than the corporations.

                    I didn't say this benefits people. I just said holding it constant doesn't. So to sum up: Not expanding it causes problems. Expanding it to much causes problems.

                • Re: (Score:2, Insightful)

                  by Hooya (518216)

                  > 76 million people in 1900 with all the currency distributed amongst them... 300+ million people now... that means the currency is going to be distributed a lot more thinly...

                  Ahhh.. the Fed is the Capitalists way of "distributing" wealth.

                  Say, I have $1000 and there is 100,000 in circulation. That means my share of the total wealth is 1/100. Now if the Fed pumps in another 100,000 my share is suddenly 1/200. The other way to achieve that same effect would have been to tax me 50% on my savings. But then t

                  • Re:The Fed (Score:4, Interesting)

                    by vux984 (928602) on Saturday October 16, 2010 @05:40PM (#33920090)

                    Say, I have $1000 and there is 100,000 in circulation. That means my share of the total wealth is 1/100. Now if the Fed pumps in another 100,000 my share is suddenly 1/200.

                    That's why wealthy people don't have a lot of cash. Wealth is measured in dollars, but only a fool would keep his wealth IN actual dollars. Dollars are not a store of wealth, they are convenient for transactions.

                    A plot of land, a herd of cattle, a gold bar, a factory,... if the fed pumps in another 100,000 the valuation of these assets just goes up in dollars. Your real wealth is unaffected.

          • by dkf (304284)

            If a candybar cost 1 penny in 1910, and now costs about a dollar for the Same candybar, it's obvious the money has been devalued to 1/100th its previous value.

            Is it really all that obvious? The costs associated with producing a candy bar will have changed over that time, and the amount that people earn has also changed for sure. It's better to scale things by average salary so that you're looking at how much stuff people can afford.

          • Oh lordie, do they teach kids nothing in school these days?

            Inflation is where prices rise in the economy at a somewhat variable rate. If that rate is small but appreciable it means that storing your money in a mattress (where it does nothing for anyone) means that you effective LOSE spending power. Thus, inflation encourages people to INVEST their money, in shares, bonds, the money market, or even a good old savings account. This means that the money is USED, which grows the economy.

            So, to carry on your g

            • More importantly, inflation isn't necessarily "good" -- but deflation is *deadly*. When the most profitable thing you can do with a million dollars is put it in a safe and wait, business and economies grind to a halt and go down in flames. Especially things that cost a lot of money and have long supply chains. Would anyone knowingly and intentionally spend $250,000 to buy land and build a house that they'll only be able to sell for $180,000? Or spend $20,000 to build a car that will only be worth $18,000 wh

        • >>>issues that the Fed currently exists to handle

          Let the Congress do it, per the Constitution, rather than a private company.

      • by mcgrew (92797) *

        Those are state laws. I think it's a great idea to make it federal. Goddamned corporations are all thieving bastards who need to be kept on a tight leash.

      • Re: (Score:3, Interesting)

        by emt377 (610337)

        BTW binding arbitration doesn't mean much. Paypal tried to include that in their TOS but when they later were sued by State AGs for stealing money from customer accounts, the justice quickly nullified the clause as being in violation of consumer protection laws. He said that users cannot sign-away rights already protected by superior laws. Same applies here with the wireless carriers.

        Sounds plausible. From a broader perspective one has to ask whether a corporation that tries to make customers sign contractual agreements that make them think they've forfeited inalienable legal rights is bargaining in good faith. It ranks up there with usury and breaking people's legs to make them pay up. It also ought to run right into our constitutional right to due process.

  • eh? (Score:2, Funny)

    At least this shows congress doesn't deepthroat the corporations dicks They just go halfway in
  • by jeffmeden (135043) on Saturday October 16, 2010 @09:30AM (#33917084) Homepage Journal

    Tis the season for the government to crack down on abusive practices by your secretly evil national wireless carrier

    That is the worst kept secret EVER. They are all evil, every last one of them, and if you don't know this by now then you must not have ever had a cellphone before.

    • by hedwards (940851)
      Yeah, I thought it was just there to try and bias the reader in opposition to the move. You might not notice the evil at first, but you will, unlimited plans which are somehow less than limited, roaming charges when you're in your own dinning room and don't even think about using your phone if you're within a few miles of the border.
    • by gagol (583737)
      I am from your up north neighbour, and I resigned my cell phone. I don't miss it and if I ever need one for my job, I expect it to be paid by my employer. I simply gave too much money to those evil entities. A fraudulent 360$ bill made me simply stop paying for those services. I wish their executives rot in hell, or at least get raped before they die from a painful death.
      • >>>A fraudulent 360$ bill made me simply stop paying for those services

        I hope you did not pay. So can we hear the rest of the story? What happened that they charged you fraudulently? I was charged a similar amount for roaming calls, but it was not fraudulent - it was perfectly legal.

        Your story reminds me of the Verizon customer that was charged 76 dollars when it should have been 76 cents. He eventually was given a full refund, although it took a month and an embarrassing website to get it. .00

        • by gagol (583737)
          I added 60 minutes to my forfait, they billed it three times on the first month and never used it to cover my extra minutes, for which they billed them at the exorbitant rate of 1$ per minute... At that rate I could use an Iridium phone over satellite. The company (Telus Mobility) never excused or agree to rectify the situation. Our agreement then would be me stop paying, and them pull the plug. I kept the Android phone...
          • There must be more to this story. Why would a company bill you $30 overage protection (180 minutes( and then not use it? Makes no sense, unless you're not sharing some crucial part of the story - like maybe the minutes didn't roll over month-to-month.
  • When did this become a business methods and government regulation discussion site? Debt collection practices by monopolies is not a technology discussion.
    • by jeffmeden (135043)

      How many slashdotters *don't* spend more than 100 bucks a month on their evil carrier overlord of choice...

      Go ahead, ask around, I will wait.

      I know I don't, and anyone with a smartphone is lucky if they are under the 100 mark (god help them if they have a family)... Smartphones are the new geek gold standard, and I for one want to keep an eye on carriers. They are up to some sneaky shit.

      • Re: (Score:1, Informative)

        by Anonymous Coward

        Verizon Droid: $40 voice, $30 "unlimited" data = about $85 after fees, insurance and taxes.

        • by Sponge Bath (413667) on Saturday October 16, 2010 @11:23AM (#33917744)

          Here is what AT&T charges above the advertised rate for my wireless:

          Credits, Adjustments, and Other Charges:
          * Regulatory Cost Recovery Charge: 0.66
          * Federal Universal Service Charge: 1.04
          * TX Franschise Tax Recovery: 0.30
          * Texas Universal Service: 0.65

          Taxes:
          * 911 Service Fee: 0.50
          * Tx State Telecom Tax: 2.72
          * City Telecom Tax: 0.44
          * City District Telecom Tax: 0.29

          The important thing to note here is the "Credits, Adjustments, and Other Charges" section is not taxes. They are fees with names made up by AT&T to sound like taxes so customers won't complain. In reality this section is just an additional $2.65 monthly charge not included in the advertised rate. They should clearly state a rate for everything that is not taxes. But, of course, they are evil and regulation is weak so that will never happen.

          • Re: (Score:3, Insightful)

            by Swanktastic (109747)

            The Universal Service Fund really is a tax. The bill was written specifically to make the phone companies look bad (ha ha I know) by taxing them above and beyond normal federal tax rates, then giving them the option to pass the charge onto their customers. Every business on the planet is going to pass that tax on, but congress can look good by saying "Hey your evil phone carrier is not voluntarily taking this tax out of their profits!"

            When possible, politicians try to have someone else collect their taxes

          • Re: (Score:3, Informative)

            >>>"Credits, Adjustments, and Other Charges" section is not taxes.

            Uh, yes, yes they are taxes (and all it took was a google search to find this shit):

            - "The Federal Universal Service pays for four programs: Lifeline/Link-Up, High-Cost, Schools and Libraries, Rural Health Care (fcc.gov)
            - TX Franschise Tax Recovery is a tax (www.state.tx.us)
            - Texas Universal Service - ditto (www.state.tx.us)
            - "The Regulatory Cost Recovery Charge is a charge assessed by AT&T associated with payment of government

            • by JustNilt (984644) on Saturday October 16, 2010 @07:01PM (#33920582) Homepage

              They're taxes, yes. The thing is, they're taxes on the telco that they are passing through to you based on an estimation of your share" of their actual obligation. The money you pay the telco goes in their pocket and if they slightly over-collect from enough people they can pocket it. This is distinct from sales tax which mandates any over-collection to be turned over to the state. The "taxes" section is taxes you owe that the business collects on the government's behalf. This distinction is why they're separate.

              Honestly, what a business should do when they get a tax increase is raise their rates. People object, of course, so the telcos lobby heavily to be allowed to "pass this on" directly so they don't look like the bad guy. In reality, it's a simple cost of doing business and should be rolled into the normal rate. At least, that's my opinion.

      • by Cylix (55374) *

        I'm way under a hundred actually.

        Now, in fairness tmobile has some nice pricing and my plan actually used to be cheaper. However, the moment I try to use a lower minute plan is when everyone wants to call me. That has probably more to do with karma then anything else.

      • >>>How many slashdotters *don't* spend more than 100 bucks a month on their evil carrier overlord of choice...

        I don't. My phone costs $0.00/month, and I'm billed per minute of use It's actually cheaper than my wired phone ($15).
        I don't use the data features, because I'm almost always sitting in front of a computer when I need net access.

      • Verizon prepaid. I keep it because I'm on call every 4th week. I don't want to be tied to the house for that weekend. It costs me about 50 cents a day, I guess, unless I actually USE it. Then, it's about a dollar a day. Don't need or want any more than that, unless I can get unlimited data and tether it to my home computer. Since there is no tower close enough to me, that isn't happening.
      • by arth1 (260657)

        How many slashdotters *don't* spend more than 100 bucks a month on their evil carrier overlord of choice...

        Me? Up until recently, I spent ~$30 per month (including all the extra taxes and charges), but I decided that this was tossing money out the window, considering that I spent around 2 minutes of talk time and 5 minutes of data time each month.

        One phone is a necessity.
        Two is a convenience.
        Three is a luxury.
        None is heaven.

        • For a few months, I tried living without any phone service at all. It can be done.

          Was pretty amusing whenever I was asked for a phone number. No one believed that I didn't have one. They took this attitude that I was just being difficult. The driver's license office was the worst. Would not proceed without a phone number. A valid passport wasn't enough for them. (Doesn't say good things about campaigning against cell phone use while driving, hmm? However I don't care for the implicit government sup

      • I pay $39.99/month including taxes for "T-Mobile Total Internet Voice Bar".

        Unlimited data (I have regularly exceeded 1GB a month, and occasionally much higher when tethering).
        SMS is enabled, but charged at $0.12 each. I don't use it anyway.
        Voice calling is barred.

        I bought a Nexus One at launch, and I have free incoming and outgoing voice and text courtesy of Google Voice.
        I have a free SIPgate account to give me a number to forward GV to. I also have a Gizmo5 account, which is better integrated with GV, but

        • by tepples (727027)

          I pay $39.99/month including taxes for "T-Mobile Total Internet Voice Bar".

          I asked about that in a Best Buy Mobile store in Fort Wayne, Indiana, USA. But they wouldn't sell me an Android phone up front, and they wouldn't sell me one subsidized by a data plan unless I signed up for $40/mo voice. I would use fewer than 10 percent of the included 450 minutes per month, and that'd be a heavy month for me. So I still have a dumbphone on Virgin Mobile.

          • by tombeard (126886)

            I know it's not a "modern" smart phone, but the Treo650 can be had for $100 new on Ebay. Quad band GSM, web, email, ebooks, music, calender and it backs up to my linux pc.

      • by CffnDwllr (644273)

        How many slashdotters *don't* spend more than 100 bucks a month on their evil carrier overlord of choice...

        Go ahead, ask around, I will wait.

        I pay ZERO for my telephone services. I'm disabled and used my lifeline benefit to get a free cell phone, via reachoutwireless, that includes 60 minutes per month. I use about 10 minutes each month and the unused minutes DO roll over. I have a Google Voice number that I give out to everyone so they can leave messages for me. But then, the only people who ever call are Doctor's offices reminding me of appointments.

      • by EllisDees (268037)

        T-mobile prepaid with no data plan and I pay about $15 a month on average.

    • by hedwards (940851)
      Since Libertarianism gained credibility around here. I think this has more to do with geeks and our wireless toys. It's not particularly useful to have an iPhone if you don't have a carrier. Although, you can use a Nexus One completely without carrier if you wish. But that basically makes it a very expensive PDA/Skype client.
      • It's not particularly useful to have an iPhone if you don't have a carrier.

        Then explain the iPod touch and its App Store. What's the closest Android counterpart to iPod touch?

    • by bogaboga (793279)

      Let me remind you that Slashdot carries "news for nerds, stuff that matters" a category in which I believe this story falls.

    • Huh? (Score:1, Insightful)

      by Anonymous Coward

      Cell phones and mobile networks are technology. They are some of the most complicated consumer technology we have today, in fact. Anything and everything relating to such technology is surely fair game here at Slashdot, even if it involves the companies who provide the technology, or the consumers who use it. After all, they're the ones who drive the technological developments.

  • by jonwil (467024) on Saturday October 16, 2010 @09:43AM (#33917172)

    They should ban forced arbitration clauses in any one-sided contract including credit cards, telecommunications service, cable service and utility service.

    • You forgot about job applications and "agreements"?
    • by TheGratefulNet (143330) on Saturday October 16, 2010 @11:28AM (#33917780)

      and employment contracts!

      those are even worse and we all have a lot more to lose on those.

      want to work for another company? is it related to what you do now? there is probably a 'no compete' clause that is actually illegal in your state and yet still prominently listed in your contract.

      cell phones affect 'the masses' and the worst that happens is you lose your phone and get upset. its a problem but its not 'americas biggest problem' right now. not saying employment is, either, but its FAR more life damaging if your company wants to put the screws to you than some stupid cell phone toy gadget. you NEED your job (or a job) to live. no one NEEDS cellphones, those are toys for the rich (even though every single commercial tries to convince you that 'everyone needs a cellphone'). I lived decades and decades without carry a portable phone. its NOT needed!

      but jobs, those are needed.

      forced arb. in employment contracts are far more evil an than any cellphone co.

      and nothing is being done about the state of employment contracts.

      arbitration is evil but why is congress only attacking the cellphone part of the problem?

      • no one NEEDS cellphones, those are toys for the rich

        Unless you're competing with a hundred other people for the same position, and your employer picked someone else because someone else picked up the phone for a callback after the callback to your number went to an answering machine.

    • by schwit1 (797399)

      Is forced arbitration bad if both sides have equal say in the arbitration process?

      • by phorm (591458)

        It's often not just "forced arbitration", but "arbitration in state X"... so there's some expensive travel involved too. On top of that, the carrier is going to try and find an arbitrator who commonly favors its side, so you're pretty much screwed.

      • Is forced arbitration bad if both sides have equal say in the arbitration process?

        The sides rarely have equal say. For example, the larger party often reserves the right to choose the state in which arbitration happens.

  • Arbitration is essentially a system of parallel, private courts run by corporations, for corporations and for the express purpose of denying justice and avoiding the laws of the land. It's an absolutely corrupt system and should not be allowed to exist in any form whatsoever. Allowing seemingly innocuous instances of this practice has lead to private companies forcing rape victims to give up their rights [youtube.com]. Corporation employees can abuse people in any way they please and can rely on their own private courts to avoid any reprecussions. Judges support this creeping privatisation of the judiciary as they are rewarded with handsome salaries as the private magistrates of these twisted courts.

    Around the time of the Jamie Leigh Jones rape arbitration scandal, I remember speaking with someone in management about arbitration--I live in Ireland. He claimed that the trend in business--magazines, conferences and so on--was pushing arbitration heavily. As the "modern" way of doing business. The conversation sent a chill down my spine. The laws of my country and the people in it were being put in dire jeopardy, our legal protections being replaced right under our noses by this latest innovation in American savagery. At least I live in the EU; I can only imagine what must be occurring in Latin America or indeed the US itself.

    Arbitration is lawlessness. It is rule by the powerful over the weak. It's not even a form of order, as arbitration courts have no strict rules, no obligation to consider precedent, no means of appeal, and are not even obliged to publish their rulings, let alone have an open court. The North Koreans have a more enlightened legal system--and again that is not hyperbole. Any society that accepts the rule of such courts has abandoned all pretence of justice and equality and has turned the clock back a thousand years before even the Magna Carta. And no other society should follow them down the path to ruin.

    • Arbitration is a system for settling disputes easier, with less cost to parties involved, and less weight on the justice system. Doesn't mean it should be used for everything (or perhaps even for most things) but it is useful, and isn't an invention of companies. The government can use arbitrations too. Where I live, any traffic insurance suit under $25,000 goes to arbitration, not court. That is state law, not private companies saying anything. The reason is there's a lot of that little shit that happens.

      • Re:Ummmmm... No (Score:5, Insightful)

        by ObsessiveMathsFreak (773371) <obsessivemathsfr ... t ['om.' in gap]> on Saturday October 16, 2010 @02:00PM (#33918810) Homepage Journal

        The whole point is just to keep costs down.

        Yes, and this is done by denying people their rights. It's much cheaper to pay a rent-a-judge to deliver the verdict you'd prefer; I'm not disputing that. But my position is that this is an illegitimate system, and is essentially lawlessness in a pinstriped suit.

        Also please note that the KBR case is a bit of an oddity.

        It was the purest form of arbitration. The whole rotten system was laid bare for the world to see just how corrupt it really was, and exactly what its true purpose is. There are numerous examples of companies having people signaway their rights with smallprint mines in contracts. It's fraud, and the financial system once again leads the way, with credit card contracts being rife with these crooked mandatory binding arbitration clauses.

        The problem was that there was (and really is) no Iraqi justice system to go to.

        So where there is no law, we must rely on private industry to make its own. No. Never. Better no law at all than a corporate one--and that's not hyperbole!

        • No it is NOT done by denying people rights. What part of the "You still have a right to trial," did you see? Also please note in the case I'm talking about this is NOT A CORPORATE MATTER. It is a matter of state law, you know, the same state that runs the courts. It is a cost measure, pure and simple, and preserves rights at the same time. Works well. That doesn't mean all arbitration works well, but it means not all of it is evil.

          And no, we don't need no law, we need to deal better with the problems of mil

        • Re:Ummmmm... No (Score:4, Insightful)

          by wanax (46819) on Saturday October 16, 2010 @07:32PM (#33920728)

          Arbitration is useful in many circumstances.. just not when it's in one-sided contracts. My grandfather, for example, served as an arbiter for quite a few years after he retired. Most of the disputes he presided over had to do with local business disputes over payment, quality of goods, etc.. they were too large to be adjudicated in small claims court, and too small for it to make sense paying lawyers for full blown civil litigation. Sometimes there initially would be a court filing, and the judge would recommend the parties go to arbitration instead since it would be cheaper for both, in which case most of the time the parties both go and select a mutually acceptable arbiter.

          The main problem with arbitration occurs when one party gets to choose the arbiter, which leads to moral hazards and conflicts of interest. Even consumer-corporation binding arbitration would not ipso-facto be a bad thing, so long as the consumer had equal say in choosing the arbiter (which would tend towards local arbiters). The two problems with binding arbitration in the consumer contract world is that the corporation chooses the arbitration firm, and the locale. This means that it's often no cheaper for the consumer to go into arbitration than it would be for them to sue (since say, they live in Kansas and the arbitration firm is in California), while the corporation can put a lot of pressure on the arbitration firm to find in their favor as the price of continued business.

          As long as arbitration remains essentially local, and the arbiter is mutually acceptable to both parties, it's often a lot cheaper while being just as equitable as a civil tort (more so in some cases, since you can pick an arbiter that has expert field knowledge, rather than hoping the judge is a quick learner).

    • Re: (Score:3, Informative)

      >>>private companies forcing rape victims to give up their rights

      Nice spin, but you blatantly skipped a crucial piece of information - The rape happened in Iraq, not here at home where US laws apply. No corporation could ever get away with raping a woman on US soil, and then force her to go to arbitration. The US and State Laws would apply.

      .

      >>>At least I live in the EU; I can only imagine what must be occurring in Latin America or indeed the US itself.

      Yeah it's like the Wild West in the

    • Except for one thing: arbitration clauses rarely stop people from going to court if they really want to. The real courts, as you might well imagine, take a rather dim view usurpers. The law is only put in jeopardy if arbitration effectively blocks access to the courts, but it doesn't appear to be too effective in preventing attorneys from filing lawsuits and forcing parties to show up in real court. In the days before the Magna Carta there was real power behind arbitrary tribunals because the people in char
      • Re: (Score:2, Interesting)

        by n4djs (1097963)
        This reminds of the time where I was at a go-kart track in NW Atlanta with my 11 year old son. Tons of signs "not liable for injury, we maintain no insurance"... He smacked the kart into the end of a concrete lane separator at ~20-25 mph, and his mouth hit the steering wheel of the kart, and his upper lip hit his teeth, resulting in a fair amount of blood. People from the track came to help, and they were looking at him and suggested that we take him to the emergency room. I suggested that they had not stra
  • by LouisJBouchard (316266) on Saturday October 16, 2010 @10:38AM (#33917454)

    The problem is that the Federal Government did not do anything to get arbitration removed by Credit Card issuing banks.

    What happened was that the banks used an organization called NAF which was literally funded by the banks. Of course NAF found for the banks 99% of the time. Then the MN Attorney General looking to make a name for herself took NAF to task and NAF folded. That left 2 arbitration forums that were more expensive for the banks and more consumer friendly than NAF.

    Some consumers actually read their contract and when they were brought to court for not paying their debts, used the contract against the banks to force the banks into paying 5-figure arbitration fees for 4-figure debts. The court judges in some states started to go along with the consumers. Hence, the banks removed arbitration from their contracts because they could not outright use it to screw over the customer anymore. Of course, the banks have a 98% success rate in court but that is because people do not answer the cases when summoned and even if they do answer, most answer "I cannot afford to pay".

    Do a search on credit debt collection boards and you will find what I mean about the above.

    So, since congress did not remove the arbitration clauses, why are they saying they did. Are they trying to turn this into something like the Providian case where they OCC entered at the last minute then turned around and said that state AGs cannot take banks to court for violations using that case as a success (again, look up Providian Credit Card Case)? I wonder if they are trying to protect the cell phone companies rather than the consumers.

    • >>>since congress did not remove the arbitration clauses, why are they saying they did

      The Congress has the right to lie.
      So too does the EU Parliament.
      Take credit for things that were performed by a completely separate government (MN).

  • Forced arbitration is already unenforceable in provinces such BC and Ontario. Why don't they just bury in the contract that you forfeit your first born in the event of a dispute. Contract language needs limits, market forces alone are insufficient.

  • Normally the Constitution is taken to mean that a person maintains their rights even when they do not want those rights. The expectation of the right to trial by jury is normal. The notion that one can sign away one's right to the protections of the justice system holds no water at all and has only been tolerated because the big money players wanted it in place.The worm has turned.

  • If I'm recalling correctly, the federal 9th circuit struck down the binding arbitration clause of the contract in a suit against Verizon, stating that a cell phone contract is a contract of adhesion, and that one can not sign away their rights to legal recourse. I'm sure read this from a story linked from a /. front page post. I don't have the time to find this, but hopefully my post will jog someone's memory and they'll get a +5 comment for recalling it.

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