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Arbitration Fairness Act Idea Reinforced by Additional Proposed Legislation

Friday, October, 14, 2011

The Arbitration Fairness Act, proposed but not enacted during several recent sessions of Congress, will soon have a close cousin on the legislative calendar of the U.S. Congress in the form of the Consumer Mobile Fairness Act, which was proposed this week by Senators Richard Blumenthal and Al Franken.  Both are Democrats, with Franken representing Minnesota and Blumenthal representing Connecticut.  The proposed law would ban the practice of placing binding and mandatory arbitration clauses into the contracts that cell phone consumers must sign in order to receive service for their wireless devices.


Does this Herald the Demise of the Arbitration Fairness Act?


Some legislative analysts speculate that the introduction of a separate law just for wireless service contracts is an indication that the Arbitration Fairness Act is not likely to pass in its full form during the current session of Congress.  The new law, if passed, would allow customers to take their disputes to court rather than see them decided by the arbitration process.


According to Senator 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.”


The proposed law would make no changes to credit arbitration.