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Consumers: You May Be Forfeiting Your Rights Online


As recently reported in the New York Times, a full one-third of top ranked websites forbid consumers from suing them for damages, unsavory practices, inflated charges, and general bad behavior through inclusion of forced arbitration clauses and class-action ban clauses.

The prototypical cartoon image of two figures standing toe-to-toe and one red-faced man shouting into the other’s face, “So sue me!” has been replaced by a bespectacled corporate lawyer interceding between the pair and reciting, “Article 7 Section 3 of the User Agreement Clause states that you have forfeited your right to sue my client, but may submit to forced arbitration in a state far away from here, at your own considerable time and expense.”

We’ve written before about isolated examples of these clauses, and some sites including provisions preventing customers from writing negative reviews about them online, but the trend towards including them looks like the proverbial runaway train.

According to the Times, 68 out of the top 200 online retailers utilize at least some form of these prohibitions. Likewise, roughly one-third of the 500 most visited websites included at least one of these clauses.

The article cites a class-action lawsuit against several online travel agencies alleging hotel room price fixing as an example of the quashing effect these clauses have. Travelocity was one of the defendants, and its lawyers successfully argued that its customers couldn’t join the suit because its long-form small type user agreement stipulated that consumers agreed to forgo their right to sue, and enter forced arbitration, individually. Which no one has done yet.

Travelocity lawyers had the audacity – of course they did – to paint these arbitration clauses as beneficial to the customer. As the lawyers argued, “…this provides for a consumer-centric approach to dispute resolution that is both faster and more budget-friendly for consumers than traditional courts.”

Stupid consumers. If only they had the smarts to realize that these clauses were forced upon them for their benefit.

It must be nice to be a website.

That “I agree” button that you click at the bottom of these impenetrable legal-speak documents is called “clickwrap,” by the way, but that’s so yesterday. To further dissuade any smartypants from perusing the agreement, many companies are switching to merely providing a link to the terms. This is called “browsewrap,” and as a writer, I think English professors should launch a lawsuit against whoever coined these words, for crimes against the English language.

Oddly enough, attorneys who represent consumers disagree with Travelocity’s lawyers. The National Association of Consumer Advocates (NACA) conducted a survey of 350 consumer attorneys in 46 states back in 2012 about forced arbitration clauses in both the online and “material” world. The attorneys overwhelmingly felt these clauses deprived consumers of their right to sue, and they themselves were living proof that it was so.

Eighty-four percent of the consumer attorney respondents admitted to rejecting a client with a meritorious case because of an arbitration clause, with “10” being the median number of cases they’d turned away. Eleven percent of the lawyers claimed they’d turned down up to 90-100 cases for this reason.

Additionally, over 90 percent of class-action attorneys declared that they could not have prevailed in cases they’d won if an arbitration clause had been involved.

NACA also found that cases in arbitration are significantly less likely to settle prior to a final decision.

In a country that prides itself on fairness and where complex issues are so frequently reduced to simplistic bumper-sticker solutions (Ebola, anyone?), you’d think putting the question “Do you think companies should be allowed to prevent you from suing them if they screw you over?” would be a no-brainer that would stir outrage. Instead, every day, consumers by the millions click a button that, in essence, says, “Yes. Yes, I do.”

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