TWiki . Main . CapitalOneArbitration	TWiki . { Main | Edumacation | TWiki | Test }
	Main . { Home | Users | Changes | Search | Go }

Although the major promise of binding arbitration is a more economical and efficient legal process, it also typically eliminates punitive damages, class actions, and other valuable protections such as discovery. It even allows the arbitrator to ignore legal precedents that have been established by the court system, and it does all this without any provisions for appeal.

While reducing legal costs is a laudable goal for all parties in a lawsuit, most of the other aspects of arbitration are far more advantageous to a large company than to an individual consumer. Indeed, binding arbitration effectively eradicates the class action rights that Congress established to ensure that businesses had an incentive to treat consumers fairly, even in situations where losses suffered by individual consumers would be too small to make individual lawsuits feasible.

This makes it seem puzzling that CapitalOne  would send us a notice that they were adding a clause requiring mandatory arbitration, while at the same time, providing an option to reject mandatory arbitration.

A call to CapitalOne  customer service did not provide any insight into their motivation for being so magnanimous about this arbitration clause, but since CapitalOne  has never done anything that didn't serve its own interests, we've done a little research and come up with the answer.

Here it is: It is not unusual for mandatory arbitration clauses to be challenged in court. Courts may find that consumers had no choice but to accept the mandatory arbitration clause, and on that basis, refuse to enforce such a clause. CapitalOne  is hoping to avoid such challenges by giving customers a one-time opportunity to decline the clause, while anticipating that not many consumers will bother to exercise this option. They have even made it clear that they will look for any excuse they can to reject your request to opt out of mandatory arbitration.

If you do not opt out of the mandatory arbitration clause by the January 31, 2002 deadline, CapitalOne  will not allow you to opt out at a later date.

The mandatory arbitration provision is not in your best interest. Exercise your option to decline arbitration by completing and returning the Arbitration Rejection Coupon. If you no longer have the form, CapitalOne  customer service will send a replacement coupon on request.

Topic CapitalOneArbitration . { Edit | Ref-By | Attach | Diffs | r1.1 }

You must register before editing pages or using other extended features on this TWiki system.

Revision r1.1 - 11 Nov 2001 - 07:57 by EliMantel  Privacy Policy

Copyright © 2000-2005 by the contributing authors. All material on this collaboration tool is the property of the contributing authors. Collect email addresses here. Ideas, requests, problems regarding TWiki? Send feedback.