It was about two years ago when Cingular merged for good into AT&T. Between now and then many customers have complained about a reduced quality of service. While they received quality service from Cingular, it became worse once AT&T took over full force. The issue extended even further, as many customers had to get new phones to work with the AT&T network. Consumers have been trying to sue AT&T for some time, but had to go through a convoluted process because of AT&T’s contractual mandatory arbitration clause. They’ve finally gotten past that, and a U.S. District Court in Seattle has ruled that a class action suit may proceed.
Binding arbitration is a problem for consumers, and not just in this instance. It mandates that consumers file complaints with an arbitration board rather than band together for a class action suit. This gives companies distinct advantages in two places. First, they can fight each case individually, the power of a large corporation vs. an individual, rather than fighting a force of thousands of consumers.
Second, companies foot the bill for the arbitration. Since arbitration panels compete with one another, it behooves them to side with companies, since that could mean repeat business. In fact, one study of 19,300 arbitration cases shows that the company won 95 percent of the time. That’s a staggering difference, especially considering many times consumers have legitimate beef with unrealized promises.
Of course, AT&T claims that arbitration is perfectly fair, despite the documented evidence otherwise. “Our arbitration clause is among the most consumer-friendly in the nation, and has been shown to be very consumer-friendly in other cases,” says AT&T spokesman Fletcher Cook. “We’re studying this ruling and considering our options.”
The reason for the Seattle court’s ruling: it would be too expensive for individual customers to file arbitration. Hopefully, though, part of their decision rested on the fairness of the situation. Why should consumers have to file suit individually when they’ve been universally wronged. Isn’t that the entire idea behind a class-action suit?
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