Bill Dispute? Suing Not An Option

Consumers Finding Arbitration Severely Limits Their Legal Options

[While] reading the fine print many consumers are surprised to learn they lost their right to sue when they signed contracts and must submit to binding arbitration instead, reports John Blackstone.

Photo of Hoa Nguyen:

Video: Article Video File

With hundreds of minutes included in her cellphone plan, Hoa Nguyen spoke freely. But, as CBS News Correspondent John Blackstone reports, at the end of her one-year contract her bill went through the roof.

She was “shocked,” she says, to learn her $39.99 month bill had soared to $476.

Nguyen and her son, Quincy Hoang, an attorney, figured AT&T Wireless had made a billing error.

But, as Hoang says, it wasn’t a mistake.

“We were basically told, ‘Well, we informed you in a little clause in the statement, the prior month or the month before that,'” says Hoang.

With collection agencies coming after her, Nguyen decided to sue. But she then discovered her contract said she couldn’t go to court and had to use binding arbitration.

“The courts are there to ensure fairness,” says Hoang. “With arbitration, you don’t get all the protections of the courts.”

In the past decade, the fine print in almost every contract a consumer faces has a clause requiring binding arbitration. Cingular, which has taken over AT&T Wireless, insists arbitration serves consumers.

“It’s fair, it’s fast, and oh, by the way, because arbitration would typically take weeks; litigation months or years,” says Mark Siegel of Cingular.

In arbitration each side presents its case to a neutral arbitrator whose decision cannot be appealed. Since arbitrations are confidential, it’s hard to tell how consumers fare.

“For competitive reasons and legal reasons we do not release the number of cases we handle or their disposition,” says Siegel.

Among the few statistics available are those obtained in a lawsuit against credit card giant First USA. Of more than 19,000 arbitrations for debt collection, consumers won just 87 cases.

A more recent, but small study for the American Bankers Association, found consumers prevailed more than half the time.

Arbitration clauses can help companies avoid class-action suits like the one Nguyen tried to file against the cell phone company.

“It’s just appalling, actually, that they can just change the terms and just say, ‘Hey, these are the new terms and you’re stuck with them,” says Hoang.

Nguyen is now filing for arbitration.

© MMV, CBS Broadcasting Inc. All Rights Reserved.


This article was taken from CBS. Original copy may be found at Newspaper.


The information contained in this web site is provided as a service to the Internet community, and does not constitute legal advice. Attorney Quincy Hoang tries to provide quality information, but makes no claims, promises or guarantees about the accuracy, completeness, or adequacy of the information contained in or linked to this web site. Since legal advice must be tailored to the specific circumstances of each case, and laws are constantly changing, nothing provided herein should be used as a substitute for the advice of competent counsel.

Attorney Quincy Hoang is not seeking to represent anyone based solely on a visit to this web site, therefore no attorney-client relationship is created by such a visit. If you do wish to retain legal representation for a specific matter, an agreement in writing must be executed.

Leave a Reply