In the lowdown, dirty trick department, Experian has inserted a Binding Mandatory Arbitration clause in the online agreement that you must accept if you want to buy a copy of your credit report online from experian.com. Here is the text of the clause:
You understand and agree that all claims, disputes or controversies between you and Consumerinfo, and its parents, subsidiaries or related companies, including but not limited to tort and contract claims, claims based upon any federal, state or local statute, law, order, ordinance or regulation, and the issue of arbitrability, shall be resolved by final and binding arbitration at a location determined by the arbitrator. Any controversy concerning whether a dispute is arbitrable shall be determined by the arbitrator and not by the court. Judgment upon any award rendered by the arbitrator may be entered by any state or federal court having jurisdiction thereof. This arbitration contract is made pursuant to a transaction in interstate commerce and its interpretation, application, enforcement and proceedings hereunder shall be governed by the federal arbitration act (“FAAâ€). Neither you nor we shall be entitled to join or consolidate claims in arbitration by or against other consumers or arbitrate any claim as a representative or member of a class or in a private attorney general capacity. The parties voluntarily and knowingly waive any right they have to a jury trial.
Note that I have converted the clause from all upper case because I want you to be able to read it. This is a very broad clause. Most importantly, it is not limited to disputes relating to your credit report purchase. It appears to apply to any dispute at any time with any entity related to Consumerinfo, apparently the Experian subsidiary that sells credit reports online. I assume that if I were driving past Experian’s facility up in Allen (20 miles north of my office) and was struck by an employee pulling out of their parking lot without looking, they’d argue my personal injury claim was subject to binding mandatory arbitration.
For now, it appears that Experian is the only member of the Big 3 doing this, although if may only be a matter of time before Equifax and Trans Union join in. You can avoid this problem by requesting your report by phone. It also may not be an issue if you request a free or reduced cost credit report available under various state and federal laws.
The irony of all of this is, many people who buy their credit reports online are doing so because they have some problem, which if unresolved by Experian’s dispute resolution procedures, may result in a lawsuit against Experian. How many of these people would imagine that their first step towards protecting themselves from identity theft or an erroneous report would also shut the courthouse door forever?
I wrote about this previously when I first heard that this might be happening, and explained some of the reasons why this is a very bad thing. You can find out about a campaign sponsored by a national coalition of consumer groups to create more awareness about Binding Mandatory Arbitration at givemebackmyrights.com