Before you get all excited, this decision is just one federal district court judge’s opinion. That said, here’s the deal. The Zappos website had a little link at the bottom to its terms of use, which said that, by merely browsing the website, you agree to submit to mandatory binding arbitration of any disputes — like if you had a problem with the big Zappos security breach that potentially affected 24 million consumers. Zappos tried to rely on its browsewrap agreement, but the court said no way.
Search: arbitration
PayPal is the latest to join a growing list of companies (including eBay) who want to keep consumers out of courts and class actions. You can opt out of mandatory binding arbitration, at least, but you’ll be stuck with the class action ban either way. Opting out is not easy. Here’s what you have to do:
You can choose to reject this Agreement to Arbitrate (“opt out”) by mailing us a written opt-out notice (“Opt-Out Notice”). For new PayPal users, the Opt-Out Notice must be postmarked no later than 30 Days after the date you accept the User Agreement for the first time. If you are already a current PayPal user and previously accepted the User Agreement prior to the introduction of this Agreement to Arbitrate, the Opt-Out Notice must be postmarked no later than December 1, 2012. You must mail the Opt-Out Notice to PayPal, Inc., Attn: Litigation Department, 2211 North First Street, San Jose, CA 95131.
Guest post by Aaron Hall.
Minnesota consumers can now bring more cases to conciliation court, and many see this as good news. Unlike regular district court, conciliation court was created to handle “small claims” with relaxed rules and procedures so people don’t need to hire an attorney.
Martha Kunkle is making the rounds again. The Billings Gazette first wrote about Martha Kunkle in November 2009. That didn’t stop the Wall Street Journal from writing about her just last week, over a year later. A zombie story about a zombie debt collector.
But hey, it’s a good story. A dead woman bilked thousands of consumers out of their money for Portfolio Recovery Associates. Consumer law doesn’t get much cooler.
http://www.thedailyshow.com/
The problem with the CFPB is that it is an organization with little more than guidelines. It can do many things. It may also choose not to. Just as the Environmental Protection Agency spends some administrations going soft on polluters, and other administrations prosecuting them, the effectiveness of the CFPB will depend on the person or party in power.
http://www.flickr.com/photos/robotson/38315975/
This is good news. Mandatory binding arbitration is one more way that corporations end-around the civil justice system. And it keeps getting worse, thanks to the U.S. Supreme Court.
The new bill requires the CFPB to study arbitration in financial products and services, and report back to Congress. Based on the findings of its report, the CFPB may restrict the use of arbitration or ban it outright in financial products and services. We’ll hope for the latter.
http://www.flickr.com/photos/williac/626962261/
The New York Times popped in on Tuesday with a report that at least one New York law firm is filing 80,000 lawsuits per year, enough to put a serious strain on the New York court system. Minnesota Senator Al Franked pointed out to the Federal Trade Commission that the same sort of monkey business is going on in Minnesota, and asked the FTC to take action now and through future regulation. Minnesota legislators also promise to fix the broken debt collection system.
Update: the FTC says it is going to look into debt collectors who are jailing debtors in Minnesota. No report on whether the FTC will look into the other allegations of abuse Senator Franken mentioned.
Oh, and surprise of surprises, a Chicago debt collection law firm, stopped paying its own bills. When asked if it could borrow the money from a friend or family member, the firm had no comment.
But we didn’t even get to all the news this week. We still haven’t weighed in on the sweeping (?) financial reform that Congress finally got around to. And if you just can’t get enough debt collection news, here is a sprinkling of links on the Office of the Comptroller of Currency, which is (apparently) charged with protecting banks from state laws, and on the Military Lending Act, which isn’t actually helping members of the military escape scammers and loan-shark-sized interest rates service fees.
If you take a bad thing—debt collection—and subtract fairness, it gets worse. The FTC sounded off on the problems with combining debt collection and forced arbitration. In fact, the FTC recommending banning arbitration on the mandatory binding arbitration of debt collection disputes:
Such a ban should remain in place until the arbitration process can be shown to be fair, transparent, and as affordable as traditional litigation, and until consumers have a meaningful opportunity to opt out of pre-dispute arbitration without losing access to the credit services they seek. Once these conditions have been met, Congress could lift the ban itself, or it could delegate that authority to the Federal Trade Commission or another appropriate consumer financial protection agency or bureau established in the future.
http://www.flickr.com/photos/trixer/3531445744/
In Rent-A-Center v. Jackson, The U.S. Supreme Court just ruled that arbitrators have the right to decide whether arbitration is fair or not. That is like asking a bully whether you deserve to get your ass kicked.
Justice Stevens, as the voice of reason for the minority, wondered why the arbitration clause in a contract would remain valid even when the rest of the agreement is not.
The ball is now in Congress’s court. The Federal Arbitration Act is flawed, and the U.S. Supreme Court just made it worse.
Beware the Fine Print | New York Times (via Consumer Law & Policy Blog)
Mann Bracken, the enormous debt-collection law firm, recently closed its doors, leaving hundreds of thousands of consumers unable to resolve their debts. Since Mann Bracken sues on many of its debts, the sudden closure also left courts in confusion.
One Maryland judge decided to take drastic measures. According to The Baltimore Sun, he dismissed “tens of thousands” of lawsuits in which Mann Bracken was involved. This is a highly unusual remedy, since the creditors could ordinarily simply hire a new lawyer to represent them in those lawsuits.
If you were paying Mann Bracken when it went belly-up, contact the original creditor to confirm that it will honor any settlement you may have reached.
Debt law firm’s fall brings chaos | The Baltimore Sun
