Senators Say Binding Arbitration Helps AT&T Dodge Accountability

Senators Say Binding Arbitration Helps AT&T Dodge Accountability

AT&T was a pioneer in using fine print to try and ban their customers from suing them via class action, instead forcing users into binding arbitration where corporations win more often than not. Despite the fact that many lower courts repeatedly declared such activity violated user rights and was "unconscionable," the Supreme Court narrowly ruled in AT&T's favor back in 2011, opening the flood gates for every corporation to do the same thing.

So thanks in large part to AT&T lawyers, most companies now include some variant of this language, restricting your legal rights and forcing you to use a binding arbitration process where the arbitrator more often than not finds in favor of his or her corporate employer (tip: that's not you).

This week AT&T took some heat from a handful of Senators claiming that AT&T uses this process to dodge accountability for bad behavior. In a letter sent to AT&T CEO Randall Stephenson (pdf), Senators Al Franken, Richard Blumenthal, Ron Wyden, Patrick Leahy, and Edward Markey argued that the standard AT&T helped establish "strips consumers of the right to band together with other consumers to challenge a provider's widespread wrongdoing."

"Forced arbitration provisions in telecommunications contracts erode Americans' ability to seek justice in the courts by forcing them into a privatized system that is inherently biased in favor of providers and which offers virtually no way to challenge a biased outcome," the senators wrote in a letter yesterday to AT&T CEO Randall Stephenson. "Forced arbitration requires consumers to sign away their constitutional right to hold providers accountable in court just to access modern-day essentials like mobile phone, Internet, and pay-TV services."

And while class action lawsuits certainly have their own problems, critics of binding arbitration say it's a "solution" that's actually worse than the problem it professes to cure. In this case, the Senators say they are "particularly concerned about AT&T's treatment of customer complaints alleging that the company charged a higher rate for services than initially offered in a deal or promotion."

That's a problem that runs rampant in a sector that uses hidden fees to covertly jack up the advertised price post sale. And it's a problem that's not going to get much attention from the current administration, which has made removal of many consumer protections a top priority.