Large banks re­mov­ing your right to jury trial

Daily Local News (West Chester, PA) - - BUSINESS - Janet Col­li­ton Colum­nist

In this area of South­east­ern Penn­syl­va­nia we are well ac­cus­tomed to our smaller banks be­ing eaten up by ever larger banks and the tran­si­tions these moves in­volve. One of the tran­si­tions for which we might not be pre­pared is that 9 of 10 larger banks have been found in a re­cent study by Pew Char­i­ta­ble Trusts to have in­cluded waivers of jury trial in their agree­ments.

(See “9-in-10 Big Banks Strip Cus­tomers Of Their Right to Jury Trial,” https://con­sumerist.com/2016/08-17/9-in-10-big­banks-strip-cus­tomers-of-their­right-to-jury-trial/.)

What this means is that, if you have a claim against one of these banks, you would no longer have the right to be heard by a jury of your peers. It gets worse. Ac­cord­ing to this source, 70 per­cent of these larger banks have also in­sti­tuted forced ar­bi­tra­tion clauses. It is well known that in many in­dus­tries, bind­ing ar­bi­tra­tion is stacked against the con­sumer.

This is true for sev­eral rea­sons. First the in­dus­try has greater fa­mil­iar­ity with in­di­vid-

uals who are likely to be cho­sen as ar­bi­tra­tors. The in­di­vid­ual is in a David vs. Go­liath sit­u­a­tion ex­cept that Go­liath is likely to be judged by some­one com­ing from the same team or one close by.

Ar­bi­tra­tion is not likely to re­ceive the at­ten­tion that an open court hear­ing would have. The pro­ceed­ings are likely be­hind closed doors. The par­ties may en­ter into con­fi­den­tial­ity agree­ments.

Fi­nally, as Con­sumerist in­di­cated, ar­bi­tra­tion awards tend to be lower than court awards. Con­sumers may have dif­fi­culty find­ing and pay­ing for qual­i­fied coun­sel to rep­re­sent them since the big pock­ets of the in­dus­try have more money and time avail­able to them.

All of these con­cerns re­late to ar­bi­tra­tion. How­ever, an­other and pos­si­bly more dis­turb­ing fac­tor is that some com­pa­nies have be­gun writ­ing into their agree­ments a stip­u­la­tion that con­sumers give up their abil­ity to par­tic­i­pate in a class ac­tion. Where a group of con­sumers might bond to chal­lenge an ac­tion by a large bank, now, for those banks af­fected, each per­son must bring the ac­tion on his own. While class ac­tions typ­i­cally re­sult only in small set­tle­ments for the in­di­vid­ual con­sumer, they might at least cor­rect the wrong. Most con­sumers would not bring a claim on their own un­less they are se­ri­ously im­pacted.

In re­cent days we be­came aware of some of the kinds of prob­lems con­sumers might en­counter with large banks when it was pub­licly dis­closed that Wells Fargo, one of the largest, agreed to pay a $185 mil­lion fine for ac­tions de­scribed in Forbes as “Wells Fargo em­ploy­ees (pump­ing) up their pay­checks by open­ing mil­lions of false ac­counts in real cus­tomer’s names.” (http://www.forbes.com.)

As a foot­note, le­gal ac­tion might not be over re­gard­ing that scan­dal yet.

In a case de­cided in 2011 that seems to have re­ceived lit­tle at­ten­tion at the time and prob­a­bly should be re­ex­am­ined if we have a new Supreme Court after the Novem­ber elec­tion, AT&T Mo­bil­ity LLC v. Con­cep­cion, the U.S. Supreme Court de­cided against the con­sumer on is­sues re­gard­ing ar­bi­tra­tion. Although it was not a bank case, it is af­fect­ing con­sumer con­tracts with ma­jor cor­po­ra­tions across the board. Vin­cent and Liza Con­cep­cion sued AT&T Mo­bil­ity over de­cep­tive ad­ver­tis­ing in their wire­less phone plan. Where Cal­i­for­nia law would have al­lowed a class ac­tion, the Supreme Court found that the Fed­eral Ar­bi­tra­tion Act pre­empted Cal­i­for­nia state law and found in fa­vor of AT&T.

Here is the dif­fer­ence be­tween these types of agree­ments that deny ac­cess to the Court and those com­mer­cial agree­ments to which we have be­come al­most uni­formly ac­cus­tomed.

By now we have come to re­al­ize that com­pa­nies with whom we do busi­ness can mod­ify some terms of the agree­ments. They change ser­vice fees, reg­u­la­tory pro­vi­sions and ser­vice pro­vi­sions on a reg­u­lar ba­sis and send a no­tice, some­times with the next bill. You can ac­cept or you might move on to an­other provider.

When it comes to ac­cess to the Courts, imag­ine that every com­pany with which you deal has the right to take away your abil­ity to act when they fail to com­ply with their own guide­lines or when they fail to fol­low the law and also sup­pose other large en­ti­ties do the same. Can some of the larger banks with which we deal, or other providers, re­strict ac­cess to the Courts to the point that you can no longer rely on in­for­ma­tion pro­vided or con­sumer pro­tec­tion that you thought you had. How can you pro­tect your­self? Stay tuned.

For more, lis­ten on Wed­nes­days at 4 p.m. to ra­dio WCHE 1520, “50+ Plan­ning Ahead,” with Janet Col­li­ton, Col­li­ton Elder Law As­so­ci­ates, and Phil McFad­den, Home In­stead Se­nior Care.

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