About Christine Hines

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Legislation to Eliminate Forced Arbitration Clauses and Class-Action Bans From College Enrollment Contracts Is Welcome Step

Statement of Christine Hines, Consumer and Civil Justice Counsel, Public Citizen’s Congress Watch Division

Note: Today, U.S. Sen. Dick Durbin (D-Ill.) and U.S. Rep. Maxine Waters (D-Calif.) introduced the Court Legal Access and Student Support (CLASS) Act of 2015 (PDF), which would eliminate forced arbitration clauses and class-action bans from college enrollment contracts.

It is heartbreaking to see for-profit colleges fatten their wallets by using fine print hidden in contracts to rip off students, who are working to improve their lives through education.

Public Citizen thanks Senator Durbin and Representative Waters for introducing a crucial piece of legislation that would protect students by prohibiting the use of forced arbitration clauses and class-action bans in enrollment contracts.

This legislation is more needed now than ever. Over the past few years, more institutions have been charged with using misleading and deceptive information, such as lying about job prospects, to persuade students to enroll in their programs. Then students often are left with nothing but inadequate training, meager job prospects and thousands of dollars in student loans.

Because of forced arbitration clauses in their contracts, students have no way to seek remedies for harm caused by institutions’ predatory conduct. The one-sided corporate clauses require disputes to be settled in private arbitration – instead of before a jury in an open court. To make matters worse, many of these clauses include class-action bans, which bar students from banding together to pursue claims of wrongdoing.

Students – and consumers across the board – have a constitutional right to access the court system. More legislators should fight to protect students’ rights by supporting the CLASS Act.

Consumer Financial Protection Bureau’s New Policy to Include Narrative Details From Consumers Will Enhance Its Complaint Database

Statement of Christine Hines, Consumer and Civil Justice Counsel, Public Citizen’s Congress Watch Division

Public Citizen applauds the Consumer Financial Protection Bureau (CFPB) for adding consumer narratives to its online complaint database. Now, consumers will be able to report to the public firsthand their experiences with financial services and products, allowing others to read the shared details.

This follows in the tradition of a number of other government agencies, such as the Consumer Product Safety Commission, that operate public complaint databases to help people report on and research product risks.

Consumer narratives will add to the CFPB’s already robust complaint database, which has handled more than half a million complaints. Firsthand experiences will provide a fuller picture of incidents in the marketplace and help others make more informed decisions when evaluating financial services, including services such as mortgages, auto loans and other lending products.

Consumers’ own words also will help to uncover patterns of potentially predatory conduct in financial services, such as unlawful debt collection practices. The quicker the risks to the public interest are exposed, the less likely it is that more members of the public will be harmed by the unfair or abusive practices. We expect that under its policy, the bureau will operate the complaint database while safeguarding consumers’ personal information.

General Mills’ Misadventures With Our Legal Rights, and … Power to the People!

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Finally, we can strike one off our list. We can remove big corporate food manufacturer General Mills from Public Citizen’s Forced Arbitration Rogues Gallery, an unofficial catalogue of some of the many corporations that use their fine-print contracts to deprive consumers of the right to sue, forcing them instead to resolve disputes in individual, secret arbitration.

Removing General Mills from the “Rogues Gallery” is the least we can do now that the cereal and snack maker has itself deleted the hideous “you can’t sue us for harm we cause” language from the legal terms of its website.

General Mills recently had added a forced arbitration clause to its “legal terms” on its website and prohibited class actions in its terms of service for the same reasons as most other corporations – to unilaterally deprive its customers from filing lawsuits against it and escape responsibility for causing injury.  The reason behind General Mills’ move to reverse its ill-fated decision is awe-inspiring: it’s the people!

Lesson Number One for corporate lawyers and public relations spokespersons – American consumers would like to retain their legal rights, thank you very much.

After an article in The New York Times exposed General Mills offensive terms, the people reacted, and quickly.

@Slate (Apr 19): “Why people are freaking out over General Mills’ new legal policy: http://slate.me/1haFUIo  pic.twitter.com/hcDvkNm6JN”

‏@Wonkette‬ (Apr 17‬): “You Can No Longer Sue General Mills Even If They Serve You A Big Bowl Of E Coli http://bit.ly/1iud62l” ‬

Three days after The New York Times piece was published, General Mills recanted. More

Another “Burden” on the U.S. Chamber’s Agenda

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Tom Donohue, president and CEO of the U.S. Chamber of Commerce, gave his annual “State of American Business” speech this week.  It came with the usual complaints about how corporations are “burdened” by important public protections needed to hold corporations accountable for wrongdoing, such as access to the civil justice system.

One example of such “burdens” according to the U.S. Chamber and it’s so called Institute for Legal Reform is an individuals’ right to turn to the court system when they suffer losses at the hands of Big Business. The U.S. Chamber has continuously sought to restrict consumers’ right to go to court.  Individuals already face numerous and unreasonable obstacles to access the courts, but based on Donohue’s speech, the industry still wants more. And it is seeking to combat any potential advances that would restore some of our rights as consumers in the marketplace.

One such advance which the U.S. Chamber and its financial industry friends are apoplectic about, are some recent developments at the Consumer Financial Protection Bureau (CFPB). The CFPB is in the midst of studying one of industry’s more forceful tools to restrict consumers’ rights: the use of forced arbitration and bans on class actions in financial services contracts.

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Mountain of Evidence: Consumers, Employees and Even Small Businesses Are Losing Right to Sue

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Recently, the Senate Judiciary Committee held a hearing titled “The Federal Arbitration Act and Access to Justice: Will Recent Supreme Court Decisions Undermine the Rights of Consumers, Workers, and Small Businesses?”

So, will recent U.S. Supreme Court decisions undermine the rights of consumers, workers and small businesses? The answer is a resounding yes.

In fact, the court’s rulings already have begun to have an impact. Thousands of consumer and employment disputes with corporations have and will be dismissed and disregarded because of language buried in the fine print of take-it-or-leave-it terms in everyday consumer and employment contracts.

These provisions, called forced arbitration clauses, require consumers and employees to resolve their disputes in secret, costly arbitration proceedings instead of in court. (See a PDF list of selected cases in which forced arbitration clauses and class-action bans were enforced as a result of recent Supreme Court rulings.)

The Senate hearing highlighted a handful of recent harmful Supreme Court decisions, including AT&T Mobility v. Concepcion and American Express v. Italian Colors. These cases have expanded corporations’ ability to deny consumers their legal remedies. Big businesses can now use forced arbitration clauses to prohibit participation in class actions, even if class actions are the only economically viable way for consumers to pursue their cases.

The evidence has long been clear that forced arbitration is not a legitimate alternative method to resolve disputes, despite what the U.S. Chamber of Commerce and other business entities contend. In practice, forced arbitration is used to squash valid legal claims from ever going forward. As a result, companies are repeatedly let off the hook for egregious and illegal conduct, including discriminatory acts in the workplace, faulty home building, illegal charges and fees on cell phone bills, abusive treatment of the elderly in nursing homes, and other misconduct. More

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