(Washington, DC) – Senators Richard Blumenthal (D-CT) and Al Franken (D-MN) today introduced the Consumer Mobile Fairness Act, which would ban mandatory binding arbitration clauses in cell phone and mobile data service contracts. These clauses prohibit consumers from bringing lawsuits against companies that employ abusive practices like hidden fees, instead requiring the use of an often unfair and biased arbitration system. They are pervasive in mobile service contracts, such as the ones offered by AT&T, Verizon, and Sprint for the new iPhone 4S. Consumers who purchase a new phone should not be required to sign away their right to readily access and utilize courts in the event of a dispute on a bill or service.
Said Blumenthal, “Smartphone users deserve their day in court for legitimate complaints against abuses. Consumers should have rights to access to appropriate avenues - enforceable in court – for recourse in order to hold cell phone companies accountable for poor service or excessive fees. For consumers relying on smartphones – growing in number – the shield to accountability enjoyed by companies can lead to unfair contracts and unacceptable costs.”
Said Franken, “Consumers should never be forced to give up their rights in order to purchase a cell phone or get a new data plan. This bill makes sure that Minnesotans have the ability to hold their mobile service providers accountable if they are cheated. It also ensures that any dispute resolved through arbitration is truly voluntary, and that consumers are not being forced into it."
The Consumer Mobile Fairness Act is an effort to remedy the Supreme Court’s decision to uphold the use of mandatory arbitration clauses by allowing for litigation when mediation and arbitration offer inadequate protection. These clauses are particularly inappropriate in contracts for cellphone and mobile data service plans, as these contracts are often the source of numerous consumer disputes. According to the Better Business Bureau, wireless companies have received the most or second-most consumer complaints as compared to other industries every year since 2003.