Executive Summary
According to United States law, the Federal Arbitration Act (FAA) is a statute, or written law, that applies to the transaction of conflicting parties in matters of interstate commerce. This act was first enacted in 1925 to ensure the validity and enforcement of arbitration arguments. Unfortunately, the application of the FAA to various arbitration agreements has been the subject of numerous lawsuits. Employers and businesses were initially using this method to avoid the judicial system, but instead are using it as a way to cheat their consumers.
Many consumers agree to binding mandatory arbitration clauses unaware of the repercussions that exist. Consumers are given an ultimatum in which their basic rights are absent throughout the argument mainly because of the mandatory arbitrations "take it or leave it" approach. As a result, consumers are faced to lower profit gain than expected.
This problem can easily be alleviated on the state and federal level through the implementations of the National Consumer Law Center's (NCLC) policy. This policy contains five separate laws in which problems of transparency with corporations may be solved. In addition, with the help of the Revised Uniform Arbitration Act (RUAA), corporations may be subject to intensified scrutiny by the judicial system.
There are many issues and practices in the business world today that undermine consumer rights and take advantage of consumers. Recently, there has been a new wave of unethical business practices that have emerged to the forefront of consumer issues. This new wave comes in the form of the mandatory binding arbitration clause. Arbitration is the method of resolving a dispute where two parties present their individu ...