Consumers beware: Once again, the Consumer Financial Protection Bureau is failing to live up to its name, pushing an anti-business, anti-consumer rule that ignores the findings of its own study and disregards the will of Congress.
Proponents of its rule have touted consumers’ ability to get their “day in court.” But the reality hardly resembles the rosy view of the court system that some might imagine.
If you’ve ever received a nearly indecipherable, fine-print mailing offering a coupon as part of a class action settlement, you know that the class-action system is far from ideal.
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It’s time to cut through the hyperbole and look at the numbers from the bureau’s own study. It showed that consumers recover $5,389 on average through arbitration. In class actions, consumers recover a mere $32.35, if anything, while the class action attorneys receive an average $1 million in fees per case. The average time frame for arbitration is two to seven months, while class-action cases often drag on for years.
Plus, the study showed that 87 percent of resolved class actions resulted in no benefit to absent class members; they were either dismissed by or settled with the named plaintiff only.
Moreover, most disputes are individualized (and thus, not classable) and too small for attorneys to take them to court.
Repealing the anti-arbitration rule is the only sensible thing to do. If not, consumers will bear unnecessary legal costs, businesses will face unfair restrictions, and the only winners will be the plaintiffs’ lawyers.
Don’t be misled: Their gift could come at your expense.
CEO, Myrtle Beach Area Chamber of Commerce