Report: Big Banks Beat Americans More Than 98% of the Time in Rigged Forced Arbitration

Washington, DC  — American consumers seeking justice and accountability against a bank have an incredibly low success rate, and unbelievably, sometimes must pay additional money to the bank, according to a new analysis of forced arbitration data by the American Association for Justice. The report, which analyses data forced arbitration providers are required to periodically disclose,  Forced Arbitration and Big Banks: When Consumers Pay to Be Ripped Off , found that consumers were successful in only 1.8 percent of such cases. In forced arbitration, consumers have no right to discovery or appeal. It's a rigged, unaccountable system in which banks get to write the rules and choose the arbitrator, often a repeat player who has a glaring financial interest in siding with the banks.
Specifically, this report found:
  Just 237 Americans out of 13,179 won monetary awards against banks and other financial services companies in forced arbitration at the American Arbitration Association (AAA) from 2017 to 2021, making for a win rate of just 1.8%. Consumers bringing claims against Discover were the most likely to end up paying the bank. One in five Americans who brought cases against Discover ended up being ordered to pay the bank. In fact, an American bringing a case against Discover was 28 times more likely to end up paying the bank than receiving any money themselves. Americans brought $2.8 billion worth of claims against banks and financial services corporations but won only 0.5% of that (approximately $13 million) during the five years from 2017 to 2021.   That makes the likelihood of winning a forced arbitration case against a bank nearly half the overall win rate against all corporations, which was already a pitiful 4.8%.   In more than 100 cases, Americans brought a forced arbitration case against a bank, only to be ordered to pay the bank. Those Americans ended up paying an average of approximately $24,000 each to the banks they had filed cases against.
"Very few consumers are able to go through a forced arbitration process that was put in place to cover up fraudulent behavior and limit consumer recourse," said Tad Thomas, AAJ President. "We need to prohibit the inclusion of forced arbitration clauses in the fine print, so that consumers who have been defrauded, ripped off or scammed can have a fair shot at seeking justice."
 
Click  here  to read the full Forced Arbitration and Big Banks: When Consumers Pay to Be Ripped Off report.

CONTACT Carly Moore Sfregola Email: Carly.Sfregola@justice.org Phone: 202.684.9609