Arbitration Clauses
Buyer Beware
of Arbitration Clauses!
When buying your next car or truck, read your paperwork carefully.
Some car dealers and financiers are inserting an “arbitration
clause” in the fine print to take away legal rights
if case they do something wrong to you. Currently, some Ford
credit, Chrysler credit and other bank finance contracts
include an arbitration clause. Likewise, many car dealers
are doing it, too. Watch out!
An arbitration clause does not have to be in
your contract, and an arbitration clause can take away your
right to go to court without you even knowing it! Some arbitration
clauses are written so “tight” that you could
get mugged, robbed and beaten up on the car dealer’s
lot, by their employee, and you couldn’t do much of
anything about it at all!
If you already signed an arbitration agreement,
don’t give up because you may still be able to get
around it, but the best thing is never to sign one in the
first place.
For a consumer’s view on the automobile
arbitration process, click
here.
Why is Binding Arbitration
bad?
Arbitration is like playing cards with the deck stacked against
you.
The person who is going to decide what the manufacturer
or dealer should do for you, is chosen by them and often
paid by the manufacturer or dealer. When their paycheck depends
on repeat business from “big business,” fairness
can oftentimes take a back seat to the interest of turning
a profit.
Worse yet, some auto arbitration clauses require you to
pay for the arbitration and if you lose they can make you
pay for the car dealer’s legal fees too. That could
cost you more than if you were able to simply file a lawsuit
in the first place. Because there are consumer protection
laws that make the defendants pay attorney fees, the court
process can actually cost you much less than the binding
arbitration clause. Click
here to learn more.
What Can You Do?
Carefully read the front and back sides
(including the fine print) of every document anyone asks
you to sign ... don’t
let anyone rush you. If you see an arbitration clause,
don’t sign it! Just say “no.”
After all, if they are being honest in dealing with you,
then why should they worry about having to explain themselves
to a Jury in a Courtroom?
Just mark a big “X” over the binding arbitration
clause or, better yet, tell the car dealer to “X” it
out or you won’t buy. The fact is they want your money
more than anything else and if that’s what it takes
to sell you a car, then they will “X” out the
arbitration clause. But if the dealer still wants you to
sign an arbitration clause, then leave. Go to some other
car dealer who doesn’t worry about having to be honest
with you.
Crooks, thieves and dishonest car dealers are some of the
people who hide what they are doing behind binding arbitration
clauses to keep you from suing them. A binding arbitration
clause does not protect you, but it certainly does help them
rip you off and leave you helpless to do much of anything
about it.
Protect your rights--do not sign anything with an arbitration
clause in it.
What If I Already Signed
an Arbitration Agreement?
You may still be able to pursue
your legal rights in Court if any of the following exist:
- The rules of the Arbitration require confidentiality.
- The rules of the Arbitration do not allow you to file
a class action.
- The rules of the Arbitration require the Arbitration
Panel or single Arbitrator to issue a decision without
stating the reason for it.
- The rules of the Arbitration require you to pay the costs
of the Arbitration without telling you exactly what
those costs will be.
There may also be other reasons why a car dealer
cannot force you to go to arbitration.
Too many times, consumers
are told by car dealers and manufacturers that they “must” go
to arbitration when that simply is not true. If a car dealer
or manufacturer has told you that, you should be suspicious.
Consult an attorney to find out what your legal rights
are. You probably have more legal rights than you think.
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