Consumer arbitration

In arbitration, a claimant submits a claim to a neutral arbitrator, and the opposing party (the respondent) responds to the claim. A neutral arbitrator collects evidence and hears arguments from both parties, and then issues an award. Pre-hearing conferences determine procedural matters for the arbitration hearing (such as whether the arbitration is to be confidential). Hearings, which can be held in a conference center or at an office, involve the parties presenting opening statements, evidence such as documents and tangible objects, and witnesses who testify and are cross-examined. Closing arguments may be presented at the hearing, or submitted afterwards in the form of a post-hearing brief. The arbitrator's award consists of a written decision, which may simply consist of a statement of the relief awarded to each party, or it may include a written explanation. Appeal of an arbitration decision is very limited; under the Federal Arbitration Act, an awarded may be vacated only if one of the following conditions is satisfied: • "the award was procured by corruption, fraud, or undue means" • "there was evident partiality or corruption in the arbitrators, or either of them" • "the arbitrators were guilty of misconduct in refusing to postpone the hearing, upon sufficient cause shown, or in refusing to hear evidence pertinent and material to the controversy; or of any other misbehavior by which the rights of any party have been prejudiced" • "the arbitrators exceeded their powers, or so imperfectly executed them that a mutual, final, and definite award upon the subject matter submitted was not made" ==History==

The FAA and the Supreme Court's "liberal federal policy favoring arbitration" Congress passed the Federal Arbitration Act (FAA) in 1925 to require courts to enforce valid arbitration agreements. Before then, courts routinely refused to enforce arbitration agreements, making such clauses ineffective. the Supreme Court stated that by enacting §2 of the FAA, Congress made a "declaration of a liberal federal policy favoring arbitration agreements". In the late 1990s, the National Arbitration Forum advertised its services to corporate lawyers, suggesting that the only way for companies to avoid being liable in a class action lawsuit was to insert arbitration clauses with class action waivers into their contracts. The Ross v. Bank of America class action alleged that major credit card companies illegally colluded during the late 1990s to support enforcement of arbitration clauses via amicus curiae briefs and to include materially identical arbitration clauses in their cardholder agreements. According to Ramona L. Lampley, the first generation of consumer arbitration clauses was characterized by drafters including not only class action waivers but also damages limitations, bars on recovery of attorney fees, requirements that consumers pay half or all of the arbitration fees, confidentiality requirements on the parties to an arbitration, or allowing the business to unilaterally select the arbitrator, all of which were found unenforceable by some court. In August 1999, Consumer Reports cited a then-superseded arbitration clause by Gateway where a consumer would have to pay $2,000 to file a claim, would have to mail the claim to a Paris address, and would have to travel to Chicago for arbitration hearings. In 2001, Stephen Ware suggested that requiring consumer protections in arbitration (requiring the availability of class proceedings, applying a universal cap on consumer fees without a case-by-case determination of whether the consumer can afford those fees, "requiring substantial discovery", or requiring businesses and consumers to arbitrate the same types of claims) would increase the costs of dispute resolution for the business, which would raise prices. In 2002, Julia A. Scarpino wrote that "many consumer contracts ... contain an arbitration clause" but consumers are generally unaware of the existence of arbitration clauses. Unconscionability as a defense Unconscionability is a defense to the enforcement of a contract. Most jurisdictions in the United States determine unconscionability based on two prongs: procedural unconscionability and substantive unconscionability. Procedural unconscionability arises from "contract formation" issues such as inconspicuous terms or terms offered on a "take-it-or-leave-it basis", while substantive unconscionability arises from "overly-harsh" or "one-sided" terms. Alan Kaplinsky and Mark Levin wrote in a May 1999 article that "relatively few consumer arbitration provisions have actually been struck down by courts as 'unfair' or 'unconscionable'". Charles L. Knapp, in a 2009 article, noted that Speidel only cited one case where an arbitration clause was unconscionable, and, in that case, it was based on what the Court described as "unique facts". Aaron-Andrew P. Bruhl wrote that courts are not allowed to refuse to enforce an arbitration clause because of the nature of arbitration, but courts have considered whether specific arbitration terms are unconscionable. Knapp wrote that since Speidel's 1998 paper, more cases have arisen where a party successfully asserted unconscionability as a defense to the enforcement of an arbitration agreement. Andrew Pincus, who argued on behalf of AT&T Mobility in Concepcion, described the continued existence of the defense of unconscionability as preventing an "anything goes" approach to the enforcement of arbitration clauses. Rutledge and Drahozal wrote that the savings clause of §2 of the FAA may be sufficient to prevent the application of unfair arbitration terms, which may make specific legislation banning those terms unnecessary. National Arbitration Forum ceases administration of consumer arbitrations AT&T Mobility v. Concepcion wrote the majority opinion in AT&T Mobility v. Concepcion In March 2006, Vincent and Liza Concepcion filed a putative class action in the United States District Court for the Southern District of California, alleging that AT&T improperly advertised its phones as free when purchasers had to pay sales tax on them. The Ninth Circuit affirmed, holding that Discover Bank is not preempted by the FAA and class arbitration did not interfere with "the efficiency and expeditiousness of arbitration". Therefore, the majority opinion concluded that Discover Bank is preempted by the FAA. The Concepcion decision also impacted the usage of arbitration clauses in consumer contracts, including the usage of "consumer-friendly" arbitration terms like the ones in AT&T's agreement. Several large businesses, such as Sony, Microsoft, and Netflix introduced arbitration provisions after Concepcion. Rutledge and Drahozal argue that empirical evidence calls into question the hypothesis of massive adoption of arbitration clauses by businesses. ==Aspects of consumer arbitration==

Arbitration has significant differences from litigation. Additional issues pertaining specifically to the nature of consumer arbitration have been discussed. Commentators have considered all these issues and their effect on consumers' and businesses' handling of legal claims and the enforcement of laws in determining whether and under what circumstances pre-dispute consumer arbitration agreements should be enforced. Arbitrators and arbitration administrators Consumer arbitration clauses typically name one or more third-party arbitration administrators that may conduct a dispute. These organizations assist in the arbitration process by maintaining a roster of neutrals, managing the arbitrator selection process, and maintaining rules for arbitrations they conduct. The arbitrator is typically selected by the arbitration administrator or through the participation of both parties. Most credit card issuers name the American Arbitration Association (AAA) and/or JAMS as an arbitration administrator. Before the National Arbitration Forum ceased administering new consumer arbitrations in 2009, many credit card issuers also included it. AAA and JAMS primarily hear disputes between businesses and employment disputes. JAMS is a for-profit Many of the disputes JAMS administers are high-end disputes, and JAMS arbitrators, who are attorneys or retired judges, charge "hundreds of dollars per hour". In its 2007 article "The Arbitration Trap", Public Citizen criticized this marketing by the NAF to corporations. Stephanie Mencimer of Mother Jones criticized an advertisement by the NAF to businesses describing NAF arbitration as an "alternative to the 'million-dollar lawsuit.'" A 2008 article in BusinessWeek described confidential presentations by the NAF to corporations which stated that NAF arbitration has a "marked increase in recovery rates over existing collection methods", highlighted a rule allowing the claimant to stay or dismiss an arbitration proceeding without charge, and stated that 93.7% of consumers do not respond to arbitration demands, and only 0.3% request a participatory hearing. According to a complaint filed by Lori Swanson in 2009, one presentation by the NAF to a financial services company included a slide of quotes from unnamed customer service representatives suggesting that arbitration is more advantageous to creditors than litigation because creditors "have all the leverage" and consumers are unfamiliar with the arbitration process. Minnesota Attorney General Lori Swanson filed a complaint on July 14, 2009 alleging that the National Arbitration Forum engaged in several deceptive practices. Swanson alleged that the NAF was partially owned by Accretive, a firm with ties to major debt collection law firms; Swanson alleged that the NAF covered up those ties while representing itself as an impartial forum. Costs of arbitration Arbitrator and administrative fees The American Arbitration Association charges two types of fees to parties in an arbitration: administrative fees to the AAA for its case management services and arbitrator fees to pay for the services of the arbitrator. Prior to March 1, 2013, the AAA had a tiered fee structure that capped the fees charged to a consumer claiming only monetary damages of up to $75,000 and required the business to pay the remaining fees (see below). Under the pre-2013 rules, unless the parties agreed otherwise, the arbitrator had the authority to reallocate the fees in the award. Under the current schedule, the AAA charges consumers a maximum fee of $200 (which is used to pay the AAA administrative fee), regardless of the type or amount of the consumer's claim; the business is responsible for the arbitrator fee, the hearing fee, and an AAA administrative fee. Further, the arbitrator is not allowed to reallocate the fees unless it is done "pursuant to applicable law" or if the arbitrator finds that "a claim or counterclaim was filed for purposes of harassment or is patently frivolous". According to the analysis, consumer claimants seeking less than $10,000 paid an average of $1 in administrative fees and $95 in arbitrator fees, while consumer claimants seeking at least $10,000 but less than or equal to $75,000 paid an average of $15 in administrative fees and $204 in arbitrator fees. For larger claims, the NAF charged higher fees, including fees for making requests to the arbitrator or the NAF. Cole and Blankley said that, in the data set of about 34,000 cases studied, there were only five cases where a consumer paid more than $500 in arbitration fees; in all of those cases, the consumer brought a claim and was represented by counsel. The amount of these costs has been compared between arbitration and litigation in two manners. These costs tend to be lower for individual arbitration as compared to individual litigation. Because discovery is traditionally more limited in arbitration, discovery expenses (which make up the bulk of litigation expenses) tend to be lower in arbitration. However, the increase in the prevalence of litigation-style discovery and the tendency for summary judgment and other dispositive motions to be unavailable or denied in arbitration may increase these costs such that they are no longer cheaper in arbitration than in litigation. When individual arbitration is compared to a class action in litigation, though, these costs may be more disproportionate to the individual amount of relief to which an individual is entitled. In the antitrust case American Express Co. v. Italian Colors Restaurant, the plaintiffs, who were small businesses who agreed to accept American Express cards, estimated that they would have to spend $300,000 to $1 million for an economic expert necessary to present their case, which far exceeded the damages an individual plaintiff could recover. Scholarly opinion Commentators have criticized reliance on arbitration fees to suggest unfairness towards the consumer. Edward A. Dauer said that the lowered costs of arbitration as compared to litigation may be more beneficial to businesses who tend to hire counsel at an hourly rate rather than consumers whose legal representation is subject to contingent fee agreements. Christopher R. Drahozal said that upfront arbitration costs should not affect the ability for consumers represented by lawyers on a contingent fee basis to bring claims in arbitration. Stephen Ware said that it is erroneous to only compare arbitration forum fees with court fees because, he says, the entire cost of pursuing a claim in arbitration will likely be lower than the entire cost of pursuing a claim in litigation. Peter Rutledge criticized making a distinction between attorney's fees and arbitration fees, saying that, overall, they both represent out-of-pocket expenses for a consumer. George Padis wrote that the speed of arbitration benefits consumer claimants with small claims, who would be forced to settle for smaller amounts if the business were able to engage in delaying tactics in litigation. Legal representation According to a 2009 report by the Searle Civil Justice Institute, in a sample of 301 consumer cases where the AAA issued an award from April to December 2007, consumers were represented by counsel in 151 cases (50.2%). Kristen M. Blankley described the possibility that businesses could subsidize counsel for a consumer party who would otherwise proceed without representation. Matt Webb, Senior Vice President of the United States Chamber of Commerce's Institute for Legal Reform, stated that a fair arbitration clause could allow consumers to effectively pursue small claims without attorney representation. Jason Scott Johnston and Todd Zywicki described consumer arbitration as "a process set up so that hiring an attorney offers little value to a consumer and is often unnecessary" and said that the CFPB's arbitration study's results were consistent with this hypothesis. Travis Crabtree said unrepresented consumers are "less likely to be tripped up in a procedural trap" in arbitration than in litigation. Michael Satz, though, wrote that the rules of procedure established by arbitration administrators are not likely to be understood by nonlawyers. in contrast to judges who are allowed and encouraged to assist unrepresented parties in court. Discovery Disclosure of arbitration clauses Class action waivers Most consumer arbitration agreements contain clauses that disallow arbitration on a classwide basis. These clauses, which have the effect of preventing parties from seeking relief on a classwide basis in either court or arbitration, are commonly referred to as "class action waivers". Theodore Eisenberg, Geoffrey P. Miller, and Emily Sherwin said that none of the contracts they researched had standalone waivers of class actions without arbitration clauses because, outside of arbitration clauses, class action waivers "are legally vulnerable and also politically controversial". According to the preliminary results of the CFPB's arbitration study, released in 2013, 93.9% of unique credit card contracts that contained arbitration clauses, representing 99.9% of the credit card market where contracts contain arbitration clauses, had explicit class action waivers. F. Paul Bland and Claire Prestel wrote that, for businesses, a class action waiver is "the most valuable provision in an arbitration clause". Nancy Welsh described the Supreme Court's arbitration jurisprudence as giving businesses the benefit of blocking class actions as an incentive to "provide and fund a national private small claims court". In a 2013 article giving advice to businesses on drafting arbitration clauses, Nicole F. Munro and Peter L. Cockrell wrote, "The class action waiver is the focal point of any arbitration clause. Without a class action waiver, one need not engage in arbitration." Rutledge and Drahozal wrote that although nearly all credit card contracts contain class action waivers, very few contain other provisions identified as unfair to the consumer, which they concluded is due to businesses wanting to avoid a ruling that the class action waiver, together with those other unfair provisions, is unenforceable. Location and venue The location of consumer arbitration proceedings (including whether they are conducted without the appearance of the parties or their attorneys) can be set by the arbitration organization's rules or by terms in the arbitration clause. Commentators have discussed whether businesses select arbitration locations that are inconvenient for consumers to discourage consumer claims. Jean Sternlight wrote that consumer arbitration could be held in locations inconvenient for the consumer that would contravene state law, citing the Ninth Circuit case Bradley v. Harris Research (2001), which held that a California law setting venue in California for franchise disputes involving California franchisees was preempted as applied to arbitration clauses requiring venue elsewhere. Amy Schmitz proposed online arbitration as a means for consumers to obtain relief for claims pertaining to online transactions, saying that online arbitration is superior than other online dispute resolution methods since both parties are required to participate in the process. Schmitz added that conducting arbitration online may free consumers from having to travel a great distance to pursue arbitration or litigation. Jill Gross wrote that simplified arbitration procedures that resolve small claims on the basis of written submissions are inadequate for pro se parties who may not be able to effectively make written legal arguments, citing the Supreme Court case Goldberg v. Kelly (1970), which held that requiring welfare recipients to make written arguments was insufficient due process under the Fourteenth Amendment to the United States Constitution. Gross added that arbitrations based solely on written submissions favor businesses who have greater access to documents and make it difficult for the arbitrator to resolve disputed facts based solely on affidavits. Lisa Renee Pomerantz wrote that non-arbitration forum selection clauses frequently require litigation against the business to be brought in the jurisdiction where the business is located. "Consumer-friendly" arbitration terms In response to court decisions ruling arbitration agreements unconscionable, some businesses began adding "consumer-friendly" provisions to their arbitration clauses. According to David Horton, following court decisions striking class action waivers, some businesses unilaterally added "elaborate schemes" that would provide an incentive for consumers to bring low-value claims in arbitration, such as paying all arbitration costs and automatically awarding successful plaintiffs attorney's fees. Horton wrote that such provisions were designed primarily to convince courts that arbitration provisions were not unconscionable, rather than to attract customers from competitors on the basis of such arbitration terms. Plaintiffs and lawyers attributed the lack of opt-outs to consumers not being aware of the existence of the arbitration clause or not understanding the ramifications of not opting out. AT&T Mobility (formerly known as Cingular Wireless) made numerous changes to its arbitration clause during the 2000s. The Cingular Wireless agreement at issue in the 2006 Illinois Supreme Court case Kinkel v. Cingular Wireless imposed a confidentiality requirement on the parties, generally barred punitive damages awards, and required payment of a $125 fee to arbitrate a claim of $150. Commentators, though, have criticized whether or not these terms would guarantee consumers relief. Myriam Gilles and Gary Friedman wrote that because the settlement would only be the amount of the claim, the attorney would have a difficult case in justifying a relatively large amount of attorney's fees for winning such a small settlement. The authors added that filing a complaint pro se would not alleviate this issue, as a settlement offer could be made just prior to arbitration. Number of arbitrations filed by consumers Commentators have cited statistics about the number of arbitrations filed by consumers in answering the question of whether consumers can effectively pursue claims in arbitration. Jean Sternlight wrote in a 2012 article that, according to JAMS Executive Vice President Jay Welsh, JAMS handles a "few hundred" consumer cases each year, most of which are preemptive arbitrations by alleged credit card debtors seeking to avoid debt collection litigation, and that AAA conducted about a thousand consumer arbitrations a year. Sternlight said that this was a very small number of arbitrations compared to the number of consumers required to arbitrate disputes. In June 2017, AT&T stated that 412 arbitration cases had been filed against it since the beginning of 2015. In the 2008 case Tillman v. Commercial Credit Loans, Inc., the Supreme Court of North Carolina noted the lower court's finding of fact that the defendant made 68,000 loans in North Carolina and commenced court actions against over 3,700, yet never had a consumer file arbitration against it. The Tillman court ultimately found the arbitration clause to be unconscionable and therefore unenforceable. Recent data indicate a marked increase in the number of consumer arbitration filings connected to so called “mass arbitration” campaigns, suggesting that consumer-initiated arbitrations, while historically rare, have become more common in certain contexts. According to a 2025 summary of filings with the American Arbitration Association (AAA), the organization registered 82 new consumer mass-arbitration filings in 2024, representing a total of 247,327 individual consumer claims, averaging more than 3,000 claims per mass action. Precedent and publicity Arbitration decisions are not precedential. Richard M. Alderman criticized consumer arbitration for allowing businesses to avoid unfavorable precedents rather than working within the legal system to change them. Alderman also predicted that the common law with respect to consumers would cease to evolve due to arbitration clauses promulgated by businesses. Arbitrators ordinarily do not provide a written award in commercial arbitrations. Arbitrations are also generally private: unlike in court trials, members of the public cannot generally attend an arbitration hearing or obtain a copy of the award. The CFPB's preliminary report on arbitration states that "[a]rbitration rules typically do not impose express confidentiality or nondisclosure obligations on parties to the dispute, although arbitrator ethics rules do impose confidentiality obligations on the arbitrator." Satz wrote that the private nature of arbitration eliminates the incentive for businesses not to engage in practices jeopardizing goodwill. A survey of attorneys representing employers showed that 11 out of 20 employment attorneys would consider the financial status of a represented employee plaintiff in deciding whether to agree to post-dispute arbitration, and 13 out of 20 would do so for pro se employees. ==Consumer due process standards==

Both the American Arbitration Association (AAA) and JAMS have criteria that a pre-dispute consumer arbitration agreement must satisfy as a condition of the organization agreeing to administer the arbitration. Examples include the right for the consumer to be represented by an attorney, the right for a consumer to pursue a claim in small claims court, caps on the arbitration fees charged to a consumer, requirements that arbitration hearings take place at a location convenient for the consumer, and the right to demand a written explanation of the arbitrator's award.{{#tag:ref|For specific references to the applicable rules, see below: • Right to attorney representation The authors determined that many of the clauses did not adequately inform users about the existence of an arbitration agreement or the consequences of agreeing to arbitration. In 2003, Reginald Alleyne wrote that courts tended to enforce arbitration agreements if they complied with "minimum 'due process' standards". Jean Sternlight, though, wrote that courts have rarely referenced consumer arbitration standards, and when they do, it is to defeat a challenge that an arbitration clause is unfair. In 2007, Martin H. Malin wrote in the context of pre-dispute employment arbitration agreements that the concern that "rogue arbitration agencies" could "place competitive pressure on AAA and JAMS to deviate from their rules and policies" was "not a widespread problem," in part due to the reputations of AAA and JAMS. Although Malin in 2012 commended the AAA and JAMS employment protocols as positive examples of self-regulation, he criticized the decision of the New York Court of Appeals in Brady v. Williams Capital Group (2010), which held that the American Arbitration Association's rules requiring the employer to pay all the arbitrator's fees could not override an express contractual provision requiring the arbitrator's fees to be split equally. Malin criticized Brady for allowing businesses to circumvent such protocols by stating that the arbitration provider's rules would only apply "except as provided in" the arbitration agreement. Jeffrey W. Stempel wrote that courts have refused to consider consumer protection policies as part of arbitration agreements even when the named administrator requires compliance with those policies as a condition of administering an arbitration. J. Watson Hamilton and Jean Sternlight wrote that consumers have no recourse if an arbitration organization or an arbitrator chooses not to follow its own consumer standards. There have been suggestions that arbitration regulations incorporate the consumer standards in some form. Amy J. Schmitz wrote that voluntary due process protocols are insufficient because businesses could avoid their application by using ad hoc arbitration rather than an arbitration organization, and therefore she suggested that Congress legislatively require all consumer arbitration to satisfy the due process protocols. American Arbitration Association Senior Vice President Richard Naimark said that the AAA has suggested that Congress require all arbitrations to comply with "something like the due process protocols". The Fair Arbitration Act would impose standards on consumer arbitration based on the AAA Consumer Due Process Protocol. ==Proposed modifications to consumer arbitration law==

Carve-outs Bills have been proposed that would carve out some disputes from the applicability of the FAA, nullifying arbitration clauses as applied to those disputes. The first example of such a carve-out was the Motor Vehicle Franchise Arbitration Act, signed into law in 2002, which nullified arbitration clauses in car dealership franchise contracts. Subsequent legislation carved-out disputes involving high-interest loans to military members, poultry and livestock farmers, and defense contractors bringing claims about civil rights or alleged sexual assault. If enacted, the legislation "would prevent companies from imposing forced arbitration in cases covered by consumer protection laws, as well as in employment discrimination and other civil rights matters." In addition to the primary sponsors, several other senators agreed to cosponsor the legislation in honor of Equal Pay Day 2016, including Senators Barbara Mikulski (D-Md.), Patty Murray (D-Wash.), Tammy Baldwin (D-Wis.), Kirsten Gillibrand (D-N.Y.), Heidi Heitkamp (D-N.D.), Barbara Boxer (D-Calif.), Mazie Hirono (D-Hawaii), Maria Cantwell (D-Wash.), Judy Chu (D-CA) and Jeanne Shaheen (D-N.H.). Senator Elizabeth Warren is also a cosponsor of the Restoring Statutory Rights Act. Representatives Hank Johnson and John Conyers introduced parallel legislation into the U.S. House of Representatives on April 12, 2016, Equal Pay Day. They explain, "Forced arbitration has created a rigged system that blocks women from enforcing their legal rights against unaccountable and unlawful corporations for wage violations in the workplace.” According to The Hill, "The legislation is [Senator] Leahy’s response to a New York Times investigation that found companies are circumventing the courts by forcing consumers in fine print to settle disputes privately with an arbitrator chosen by the company. The clauses often prohibit consumers from joining class action lawsuits as well." The proposed legislation states that the Federal Arbitration Act "did not, and should not have been interpreted to, supplant or nullify the legislatively created rights and remedies which Congress … has granted to the people of the United States for resolving disputes in State and Federal courts." Arbitration Fairness Act A bill with the title "Arbitration Fairness Act" has been introduced in Congress several times (more recently, a similar act has been introduced as the FAIR act). In May 2011, Democratic Senators Al Franken and Richard Blumenthal and Democratic Representative Hank Johnson introduced the Arbitration Fairness Act, which would have the effect of barring pre-dispute agreements requiring arbitration of consumer, employee, or "civil rights" disputes. Gomm-Santos and Smith also write that the Arbitration Fairness Act would conflict with the New York Convention and the Panama Convention, which allow for courts to assist in arbitration and confirm arbitration awards, and may affect the ability of businesses in the United States to arbitrate outside of the United States disputes covered by the Arbitration Fairness Act. The bill was titled the "Fair Arbitration Act" in 2007 and 2011; it was previously introduced in 2000 (under the title "Consumer and Employee Arbitration Bill of Rights") and 2002 (under the title "Arbitration Fairness Act"). The Fair Arbitration Act would impose standards on arbitration proceedings based on the AAA Consumer Due Process Protocol. The 2007 version of the bill (S. 1135 in the 110th Congress) would impose a number of regulations on arbitration agreements in general, including regulating how conspicuous arbitration agreements are, requiring arbitration to be conducted by "an independent, neutral alternative dispute resolution organization", and mandating that "[e]ach party shall have a vote in the selection of the arbitrator", who would be required to meet certain qualifications and provide broad neutrality disclosures. According to Stipanowich, the bill was opposed by "commercial clients and practitioners" who saw the bill as making it difficult for the parties to adapt the arbitration process. The CFPB can restrict or ban the usage of arbitration clauses in consumer financial services contracts based on the results of the study. or post-dispute arbitration agreements. The CFPB could also bring enforcement actions against financial businesses that abuse arbitration clauses, according to bankers. On April 24, 2012, the CFPB published a request for information on conducting the study; comments were due June 23, 2012. The CFPB has hired Christopher Drahozal, a University of Kansas law professor, as a consultant on the study. In June 2013, the CFPB proposed a telephone survey of credit card holders regarding their awareness and perception of arbitration agreements in credit card contracts. The CFPB has also issued an order for financial companies to provide copies of their consumer agreements for the arbitration study. On December 12, 2013, the CFPB published preliminary results of its arbitration study. The CFPB stated that it intended to conduct further research focusing on consumer awareness of arbitration provisions, as well as whether consumers consider arbitration provisions in deciding what financial products to buy or use. In October 2015, the CFPB announced that its proposed rulemaking on arbitration would include a ban on class action waivers in arbitration agreements and a requirement for businesses to submit arbitration filings to the CFPB. The CFPB stated that it considered but rejected options of a complete ban on enforcement of arbitration clauses or requiring arbitration clauses to "have procedures to ensure that individual arbitrations are administered in accordance with principles of fundamental fairness". The rules will be presented to a small business panel, after which a public comment period will follow. The CFPB announced publication of a proposed rule on May 5, 2016. Reception of the proposed rules was mixed. Consumer groups praised the proposed rules but criticized the CFPB's decision not to ban arbitration entirely. Nearly 13,000 comments on the proposed rules were submitted by the August 22, 2016 deadline, which, according to Yuka Hayashi of The Wall Street Journal, would entail a "rough road ahead" for finalizing the rule. Rules promulgated by the CFPB with respect to arbitration clauses will only apply to contracts entered into at least 180 days after such promulgation. According to an American Banker article, the banking industry believes that the CFPB will issue rules restricting consumer arbitration in financial services contracts. Ballard Spahr attorney Alan Kaplinsky said, "The CFPB seems to be setting the stage for a rulemaking which will likely not be favorable to the industry", citing the choice of data the CFPB included in its preliminary report. Janet Cooper Alexander wrote that if the CFPB issues regulations that have the effect of reversing Concepcion, the Supreme Court may well strike those regulations, especially if the findings from the arbitration study are deemed insufficient to justify the regulations. In October 2015, Matt Adler, the chair of Pepper Hamilton's arbitration practice, said that the Supreme Court would find the proposed CFPB rule banning class action waivers in arbitration agreements to be invalid since, he argued, the Dodd-Frank Act did not explicitly amend the FAA and the CFPB lacks expertise to make rules about arbitration. F. Paul Bland responded that the express delegation of arbitration rulemaking authority to the CFPB was consistent with other laws authorizing executive agencies to make rules. ==Consumer arbitration outside the United States==

According to Amy J. Schmitz, consumer arbitration agreements are not as regularly enforced in Europe and other countries as they are in the United States. European Union directives classify pre-dispute consumer arbitration clauses as "unfair" terms. In Germany, consumer arbitration agreements "must be written in an 'intelligible and transparent manner'" and must have the form of a separate document signed by both parties. In Canada, consumer arbitration is a matter of provincial jurisdiction and three provinces (Ontario, Quebec and Alberta) have passed legislation expressly preserving consumer access to the courts. Ontario and Quebec consumer protection statutes limit enforcement of consumer arbitration clauses and class action waivers. In Alberta, only arbitration clauses approved by the government will be enforced. In the remaining provinces and territories consumer arbitration clauses will block court access for all claims except some statutory “public interest” causes of action. In the 2011 case of Seidel v. TELUS Communications Inc., the Supreme Court of Canada held that where the text, context or purpose of a statute reveals a legislative intention to preserve court access for a statutory cause of action, access to the courts will be retained notwithstanding a mandatory arbitration clause. ==Notes==