Car dealers aren’t doing much for their image these days – so, buyers beware. Though it’s not surprising, Mother Jones reports that car dealers are increasingly turning to a sneaky little device to relieve themselves of accountability when a deal goes bad: binding mandatory arbitration. If you were to try to sue them for say, selling you a lemon, you might find yourself tapped in arbitration. Binding mandatory arbitration is a losing proposition for consumers, as we found in our recent report on how credit card companies use the predatory practice.
Ironically, these same car dealers fought tooth and nail just a few years ago to ban similar arbitration clauses in their contracts with car manufacturers:
The National Automobile Dealers Association wrote members of Congress in 2000 that if they weren’t outlawed for the dealerships, mandatory binding arbitration clauses would allow "multinational motor vehicle manufacturers…to be able to unilaterally deny small business automobile and truck dealers rights under state laws that are designed to bring equity to the relationship between manufacturers and dealers." Congress agreed and passed legislation protecting the dealers.
The good news is that Congress is considering a ban on binding mandatory arbitration in consumer and employment disputes. Please take a minute now to let your members of Congress know that you want to keep your right to take shady businesses to a public court with a judge or jury, instead of being trapped in a rigged, for-profit system where bad business practices flourish.