When you buy a product or service
and something goes terribly wrong, you may think, “I can always sue.”
But Consumer Reports warns that people often unwittingly give up their
right to sue by agreeing in advance to submit any dispute to binding
arbitration. And that can be a raw deal. Jon Perz knows that all too well. He bought used car
seven years ago, but it has hardly ever left the garage. There was an
engine problem the dealer first failed and then refused to fix, and that
made the car unsafe. The dealer also refused to return Perz’s original
$10,000 payment. Then Perz found to his dismay that he had agreed to
binding arbitration and couldn’t sue. Instead of being heard by a judge or jury, the dispute was sent to an arbitration firm selected by the car dealership. Consumer Reports says that having the company select the arbitrator can be a serious conflict of interest. And unfortunately, such arrangements can be typical in binding arbitration agreements.
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