Complaint Review: American Arbitration Association

I routinely review contracts before signing them for arbitration clauses.  If there is such a clause, I will not do business with that company.  In one case that has barred me from even making a purchase at all, because all the companies in that industry include an arbitration clause.  So if I want the product, I am FORCED to sign a contract with an arbitration clause. 

Second, I purchased a new Hyundai.  I reviewed the contract, no arbitration clause.  I felt comfortable signing the contract.  Imagine my shock when I am reading the owner's manual and find the arbitration clause buried there!  I was given the opportunity to "opt out" and did so.  HOWEVER, the judges in their infinite wisdom (yes this is sarcasm) will still enforce the arbitration clause and make you go through arbitration.  I know this for a fact because I had previously signed a contract that had an arbitration clause in it, but also stated you still had the right to go to court if you chose.  Guess what the judge decided?  That I HAD to go through the arbitration process with a biased arbitrator. 

Third, I was going to purchase carpet at Lowe's.  I signed the contract and paid for it in full.  As I was reviewing the register receipt, I saw an arbitration clause on the receipt!  This clause was not in the contract.  I was not informed of the clause.  I just happened to see there was fine print on the back of the register receipt and read it.  What a shock!  I promptly went back to Lowe's to discuss this unfair practice.  They refused to waive this clause, so I cancelled my carpet order.

The fact that there is all this false and misleading information out there about arbitration.  The fact that it is more costly then just going to court.  The fact that the arbitrator's know they must side with the corporations in order to continue to be employed, so it is not  an unbiased alternate dispute resolution.  The fact that corporations know it is unfair, and know consumers are realizing this, so they hide it their contracts or include it paperwork that you receive AFTER you have signed the contract.  The fact that the government has ruled that arbitration clauses are unfair and banned in certain instances.  These all go to show that arbitration clauses are a scam perpetuated on the American Consumer.

The European Union has rightfully banned such clauses from contracts.  The American Consumer is going to find that consumers in other countries are treated far better, and in a fairer manner then we are. 

Sign this petition if you wish to try to help change things https://www.change.org/petitions/ban-arbitration-clauses-in-contracts-stop-deleting-consumers-constitutional-right-to-due-process-via-court

It is also helpful to educate yourself before spouting off and repeating the lies the corporations and arbitrations companies have spouted.  Read the book Boilerplate: The Fine Prin, Vanishing Rights.  Educate yourself in order to at least try to protect yourself.

There is no question that the arbitration system in this country is broken. No oversight, limited discovery, no effective appeal process, expensive and unfair. Most people don't realize that arbitrators work part-time and in many cases still practice law - defending companies like the one you're litigating against.

Call your Senators and Congressmen and tell them you support the arbitration reform bills circulating the House and Senate right now. For more information visit www.arbitrationhorrorstories.com.

CROCK - AAA is a non-profit business.
The arbiters and other assorted personnel that conduct the actual arbitration hearings are paid according to their own individual requirements. These payments are NOT regulated and can be quite astronomical. The payments may quickly exceed the initial amount requested up front.

CROCK - Arbitration is sold as a quick and economical alternative to court.
The Arbitration process is easily abused and can be manipulated by big corporations. The cost of arbitration can be excessive especially when the hearings force consumers out of state.

FACT - The downside of arbitration is rarely explained to the consumer when signing a contract. The reality of the 7th amendment issues disappear in a maze of legalese in your contract and can seem quite harmless in the grand scheme of things. Anyone who questions the clause is quickly re-assured by the 'seller' that it is quick and painless. There is often NO notice in your contract that Arbitration completely and totally removes your ability to resolve your dispute through ANY other means including those that may be typically FREE through various state agencies!

CROCK - The rules and proceedings will be mailed to you when requested. I have personally requested copies and I was told 'get them off the Net! The rules and proceedings can change without notice and apply regardless when you originally signed your contract.

CROCK - AAA IS a business for profit venture that is NOT law, is NOT regulated, is NOT fair and filing any complaint against the proceedings or arbiter with AAA is like complaining to Al-Queda about Osama!

Working to rid the nation of the Arbitration CROCK

I am a former employee of the American Arbitration Association (AAA) and I can tell you that it is a very reputable not-for-profit company. Yes it does cost money to file a suit and there are expenses involved, but there is a lot of work and dedication among the staff and arbitrators/mediators to getting true justice. If you weigh out the costs and time frame involved, arbitration/mediation is MUCH less costly and takes MUCH less time to get a just decision.

It does sound like you felt that the arbitrator was bias or incompetent; however, if you felt that way, you should have (or had your attorney, that's what you pay him/her for!) talked with your case administrator about your concerns. The AAA case administrators are there, unbiased and completely competent, to help you through the process. And yes all of their sets of rules are not on the website, but you can obtain any that you wish by contacting your local office and asking for them. Please do not take this bad experience as how AAA &/or this process is.

If the arbitrator fell asleep, what did you or your attorney do about it at the time this was happening?

The phrase "suits at common law" in the Constitution has two implications. First, it means that, in any legal action (aside from criminal) that was recognized at common law, the defendant has a right to a trial by jury (provided the minimum amount in controversy is met).

Second, it excluded from this category those suits that are not "at law" but rather "in equity." The distinction between "law" and "equity" isn't important, but it's simple so I'll lay it out: if you are suing/being sued for money, then your suit is at law; if you are suing/being sued for anything other than money (such as an injunction, the return of property, or specific performance on a contract) then your suit is in equity.

The previous poster was partially correct. We no longer label any of our courts as "common law courts" because we no longer recognize, per courts, a distinction between law and equity. In other words, we no longer have "law courts" and "equity courts" because the tasks are now combined.

But the 7th Amendment still applies with full force to those actions that were recognized at common law (which means those lawsuits that would be heard in English "law" courts in 1786).

However, there was no 7th Amendment violation in the original post. First of all, only the government can violate most constitutional amendments. To the best of my knowledge, private parties that are not acting on behalf of the government cannot violate any amendments except for the Thirteenth (somebody please correct me if I'm wrong). All of the other amendments ONLY place limitations on the government.

Second of all, people are free to relinquish constitutional rights by contract. If the poster signed a valid contract that contained a binding arbitration clause, then she relinquished her 7th Amendment right to a trial by jury, and that right could therefore not be violated.

As for the "without prejudice" under U.C.C. 1-207, I couldn't say either way whether that would work, but I don't see any harm in trying!

Regarding the originators claim to have been constitutionally attacked in regards to the 7th amdt: Courts at Common-Law (these were the courts hearing cases as enumerated by the 7th) have not been convened since the late 1940's. The only way to have had your case heard in that venue would have been to motion a court into that jurisdiction, and that's no easy matter. You waived your right to that jurisdiction by failing to claim it in a manner respected (understood) by the court.

Regarding the signing of any legal document: you may want to use the following, and no no NO I am not not NOT an attorney (I'd detest treating my 'clients' in that manner):
Use the term "without prejudice" per U.C.C. 1-207 in conjunction with your signature. CAVEAT: You will need to understand the meaning so look it up.

Inside information: only a judge or magistrate may legally ask you what the term's definition.
Anyone not accepting a document with this wording may be someone with whom you might not wish with which to to business.

God bless you, God bless yours, and God bless America.

I got involved in an investment that I did not totally understand ( mistake number 1. ) and suffered huge losses. When I confronted the company that sold the investments about my losses they basically just made a big joke out of it.

I consulted a lawyer and after he reviewed the investment documents he felt I had a strong case. He was concerned that when I made the investment that I signed an agreement that the American Arbitration Association would settle any dispute ( mistake number 2. ) but urged me to proceed with a lawsuit. I lost the lawsuit, was ordered to pay the other sides arbitration expenses ( at the end of my hearing the arbitrator said he was upset that a clause that he wanted included, that the losing side pay the other sides legal expenses, wasn't included because one of the sides had not gotten back to him prior to the start of the arbitration hearing )

I almost got stuck paying the other sides legal expenses! I felt that the arbitrators comment at the end of the hearing meant he had already decided the case BEFORE ARBITRATION STARTED! The point I'm trying to make is that I wasn't forced to make the investment, I wasn't forced to sign the arbitration agreement. I just signed away without giving the matter a second thought.

To put it blunt I was taken advantage of BUT I should have researched the investment PRIOR to making the invesment. If I had researched the investment I NEVER would have invested in the first place! The company offered STUPID INVESTMENTS realizing that the only people that would invest with them were those individuals that don't bother to do their homework and simply make investments or sign documents without realizing the consequences.

I learned the HARD way. If you don't totally understand an investment, a contract, a lawyers fee agreement etc. DON'T SIGN IT! Do your homework! ASK QUESTIONS! ACT INTELLIGENT! If you DON'T, YOU WILL LIKELY GET SCREWED AGAIN AND AGAIN! If you let your guard down there are ALWAYS businesses and individuals out their ready to take advantage of you!

People agreeing to arbitration believe what "experts" tell them it is, so their only mistake at that point is being too trusting, perhaps. Arbitration abuse is only becoming more well known because credit card companies etc are starting to use it, exposing thousands more people to the truth about this biased form of alternate dispute resolution.

Also, when you have a seperate warranty, as is common with a new home, it is a third party policy that the builder/manufacturer pays for, and the home buyer never sees it until after closing. They did not agree to the arbitration in the warranty because the builder is the one who bought the policy.

It is a SCAM and sites like this seek to educate buyers about scams. You, Mr. Nebraska, don't seem to want people to come here and tell their story and for others to read it and educate themselves. You would then run out of a supply of people to flame, wouldn't you? You sound like a shill Mr. Nebraska.

YOU WERE NOT *FORCED* INTO SIGNING AWAY ANYTHING!!! DID THEY HOLD THE PEN IN YOUR HAND AND FORCE YOU TO SIGN THE ARBITRATION AGREEMENT?? IF YOU DID NOT AGREE WITH THE ARBITRATION CLAUSE, THEN YOU SHOULD HAVE *NOT* SIGNED IT. IF YOU DID NOT UNDERSTAND THE IMPLICATIONS OF THE CLAUSE, YOU SHOULD HAVE CONSULTED WITH YOUR ATTORNEY BEFORE SIGNING, TO FIND OUT IF SIGNING WOULD BE TO YOUR BENEFIT OR NOT. IT SOUNDS TO ME LIKE YOU JUST BRUSHED IT OFF LIKE NO BIG DEAL AT THE TIME, AND SIGNED AWAY, WITHOUT EVEN THINKING TWICE, PROBABLY EXCITED TO MOVE INTO YOUR LOVELY PALM HARBOR MOBILE HOME AND NOT CARING ABOUT THE HUGE DECISION YOU JUST MADE. NEXT TIME, PAY ATTENTION TO WHAT YOU ARE SIGNING, AND IF YOU SIGN SOMETHING HAP-HAZARDLY AND IRRESPONSIBLY, DON'T TRY TO BLAME OTHERS FOR YOUR MISTAKE!!!

YOU WERE NOT *FORCED* INTO SIGNING AWAY ANYTHING!!! DID THEY HOLD THE PEN IN YOUR HAND AND FORCE YOU TO SIGN THE ARBITRATION AGREEMENT?? IF YOU DID NOT AGREE WITH THE ARBITRATION CLAUSE, THEN YOU SHOULD HAVE *NOT* SIGNED IT. IF YOU DID NOT UNDERSTAND THE IMPLICATIONS OF THE CLAUSE, YOU SHOULD HAVE CONSULTED WITH YOUR ATTORNEY BEFORE SIGNING, TO FIND OUT IF SIGNING WOULD BE TO YOUR BENEFIT OR NOT. IT SOUNDS TO ME LIKE YOU JUST BRUSHED IT OFF LIKE NO BIG DEAL AT THE TIME, AND SIGNED AWAY, WITHOUT EVEN THINKING TWICE, PROBABLY EXCITED TO MOVE INTO YOUR LOVELY PALM HARBOR MOBILE HOME AND NOT CARING ABOUT THE HUGE DECISION YOU JUST MADE. NEXT TIME, PAY ATTENTION TO WHAT YOU ARE SIGNING, AND IF YOU SIGN SOMETHING HAP-HAZARDLY AND IRRESPONSIBLY, DON'T TRY TO BLAME OTHERS FOR YOUR MISTAKE!!!

Arbitration was "invented" to be between corporations, and when corporations started using it on consumers, it should have been STOPPED right there but it wasn't. The arbitration services are friendly to the industry they do work for and they want repeat business from them. They are NOT concerned with what's fair, nor do they care what consumers think of the decision. Arbitration is touted as fast, fair, and cheap. It is certainly not fair or cheap, and if it IS fast, it's probably only to make sure the home owner doesn't have time for "discovery" like they do in a court case. But no matter...the arbitrator won't look at the home owner's evidence anyway, right? You are correct, and your case is like thousands of others. Arbitration records are not public and consumers doing research before buying have NO access to these complaints. Many consumers who go to arbitration also get a gag order so they can't even warn others! Thanks for your warning that hopefully will be read by thousands of people.

In the meantime, check out news links on www.hadd.com on what the Federal Trade Commission is doing to try and get large national home builder, KB Home, to stop abusing mandatory binding arbitration. The ENTIRE HOUSING INDUSTRY needs to be investigated by the FTC for fraud and deceptive trade practices, abuse of arbitration, and violation of the Magnuson Moss Warranty Act!