Many Telecommunications Service Contracts Include Mandatory Predispute Arbitration Agreements, Which Eliminate Consumers’ Ability to File Class Action Lawsuits and Hold Corporations Accountable. Also Today, Senators Press FCC to Limit Forced Arbitration in Telecommunications Contracts.
(Washington, DC) – Senators Richard Blumenthal (D-Conn.) and Al Franken (D-Minn.) today introduced the Justice for Telecommunications Consumers Act of 2016 to boost accountability in the telecommunications industry. Many telecommunications service contracts include mandatory predispute arbitration agreements, which eliminate consumers’ ability to file class action lawsuits and hold corporations accountable. The senators’ legislation would invalidate these agreements and protect the right of consumers to sue a corporation for wrongdoing. This legislation is cosponsored by Senators Brown, Whitehouse, Markey, Sanders, and Merkley. The bill text is available here.
“Lurking in the fine print of telecommunications contracts, these arbitration agreements deceptively deprive consumers of their fundamental right to sue in court,” Blumenthal said. “This is simply unjust. The critical legislation we introduced today will invalidate these predatory clauses and open the court house doors to American consumers. Allowing consumers to hold companies liable for wrongdoings will be a boon for justice and will increase accountability in the telecommunications industry.”
“Forced arbitration clauses are often buried in the fine print of agreements we sign each and every day--like cable, Internet, and cell phone contracts--and they strip away rights from the American consumer,” said Sen. Franken. “Our bill would make these unfair contacts invalid and reopen the courtroom doors to Americans who have been wronged by giant corporations."
“Forced arbitration clauses are ubiquitous in our cable, internet, telephone, cell phone contracts. They take away our right to hold telecom companies accountable in court for unfair practices, including for deceptive billing charges, potential privacy violations, data breaches and other misconduct. Instead, we’re forced to resolve disputes with companies in secret arbitration proceedings that favor the companies. We strongly support Senators Blumenthal’s and Franken’s legislation to restore consumers’ freedom to choose how to resolve disputes with the powerful telecom industry. Congress can vastly improve fairness and fair dealing in the telecom marketplace by passing this bill,” said Christine Hines, Legislative Director, National Association of Consumer Advocates.
"Public Knowledge applauds Senators Blumenthal, Franken and their fellow cosponsors of taking the lead to ensure that consumers are fully protected against any unfair overcharges or comparable ripoffs in their cellphone, Internet or other telecom service contracts," said Gene Kimmelman, President and CEO of Public Knowledge
Also today, Sen. Franken led a letter with Sen. Blumenthal calling on the Federal Communications Commission to use whatever tools it has at its disposal to limit these unfair agreements. You can ready a copy of that letter by clicking here.
The Justice for Telecommunications Consumers Act of 2016 makes predispute arbitration clauses in telecommunications service contracts invalid and unenforceable. This includes contracts for mobile phone service, multichannel programming services, internet services, and any other telecommunications service offered by a common carrier. This legislation prevents companies from forcing consumers to waive their right to court access before a claim is even filed. It does not prevent parties from freely agreeing to arbitrate after a dispute arises. Arbitration can be a useful tool, but these clauses are exploitative and result in great benefits for corporations at the expense of consumer rights. This bill will allow consumers to sue, both individually and as a class, when their rights have been violated.
This legislation is supported by over 20 organizations. The full list is below and their support letter can be found:
Alliance for Justice
American Association for Justice
Center for Justice & Democracy
Committee to Support the Antitrust Laws
Consumers for Auto Reliability and Safety
Consumer Federation of America
DC Consumer Rights Coalition
Electronic Frontier Foundation
Homeowners Against Deficient Dwellings
National Association of Consumer Advocates
National Consumer Law Center (on behalf of its low income clients)
National Consumers League
National Consumer Voice for Quality Long-Term Care