Consumer Law & Policy Blog

Comments from the Arbitration Study Respondents: Contracts Can't Take Away Your Rights as an American Citizen

by Jeff Sovern

Last week I posted the abstract for our study, 'Whimsy Little Contracts' with Unexpected Consequences: An Empirical Analysis of Consumer Understanding of Arbitration Agreements.  The abstract observed that many respondents think that form contracts can't strip consumers of certain rights. That conclusion is obvious from the statistical data, but the written comments make the point more dramatically.  After each multiple choice question, we gave respondents room to comment. Here is some of what they had to say: 

• I don’t see how they could preclude us from filing a class action suit through a whimsy little contract
• You always have a right to pursue legal action when someone has wronged you, it is not up to one party or another to determine whether or not they will take away that right
• It is your right as an American to have a trial by a jury of your peers.
• I believe it is your American right to sue in larger court systems.
• Binding arbitrators are stipulated, right? I GUESS that stipulation could be contested, THEN we’d get a jury trial. It’s also why I avoid putting very much on credit cards.
• I did not read this information but I would expect that [suing in a non-small claims court] would be my right as a free citizen of the US.
• Based on my memory of what I think I’ve read has happened. And an old cliche, “You can’t sign away your rights.”
• I believe that would be my rights as a citizen.

The Supreme Court has a different view of what it means to be an American citizen.

I hope to write more about the article in the days to come.

Arbitration Study Shows That Consumers Who Think They Understand Clauses Twice as Likely to be Wrong

by Jeff Sovern

Last week I posted the abstract for our study, 'Whimsy Little Contracts' with Unexpected Consequences: An Empirical Analysis of Consumer Understanding of Arbitration Agreements.  But the abstract doesn't come close to capturing all the interesting  findings.  I hope to write more about some of them in the days to come. Here's something that didn't make it into the abstract:

Recall that we asked the respondents eight questions that had right and wrong answers. We also asked them how much of the contract they thought they read and had understood.  Respondents who thought they had read and understood more of the contract did get more answers correct than those who didn't.  But those who reported reading and understanding the entire contract still averaged correct responses to only 28% of the questions while those who described themselves as reading and understanding most of the contract clicked the right answer to only 30% of the questions.  In other words, their performance still fell well short of what we would think of as demonstrating understanding. Even worse, those who said they read and understood all the contract were more than twice as likely to record wrong answers as those who reported reading and understanding very little of the contract. Similarly, respondents saying they read and understood all the contract gave twice as many wrong answers as right ones.  It thus appears that those who think they understand arbitration clauses really don't.  That is particularly frightening because consumers who believe they understand the contract may feel more comfortable relying on that supposed understanding--but such confidence would be misplaced.

John Oliver on health, obesity, and the sugar industry

Go here or click on the embedded video below.

 

NYT presents a candid discussion of oil-and-gas lobbyists' strategy: "win ugly"

In what might be analogized to Mitt Romeny's infamous 47-percent remark, veteran lobbyist Richard Berman advised oil and gas companies to pursue smear campaigns to discredit environmental activists, according to a recent New York Times story on a secretly-recorded speech Berman made to industry executives in June.

This paragraph from the Times story gives a flavor of the speech:

The company executives, Mr. Berman said in his speech, must be willing to exploit emotions like fear, greed and anger and turn them against the environmental groups. And major corporations secretly financing such a campaign should not worry about offending the general public because “you can either win ugly or lose pretty,” he said.

According to the Times, Berman recommended that the industry "[u]se humor to minimize or marginalize the people on the other side." Responding to concerns about identifying the source of the funding for such campaigns, Berman said (according to the Times), "We run all of this stuff through nonprofit organizations that are insulated from having to disclose donors. There is total anonymity."

The whole article is worth a read, here.

Clarence Ditlow and Ralph Nader on the recent tsunami of auto defects and recalls

Read the Ditlow-Nader New York Times op-ed.