Tuesday, August 11, 2009

AT&T Terms of Service Bans Class Action Suits?

I've recently read about some news that AT&T has made changes to it's terms of service. Apparently, the carrier's wireless contract now discourages class action suits.

AT&T's wireless contracts apply to both new and existing customers. Consumers who sign the agreement agrees to waive the right to right to a trial by jury or to participate in a class action.

If AT&T and the consumer cannot agree on a dispute then the customers are forced into arbitration. In this situation, the case presented as a forum in which neutral arbitrators dispense the same legal implications as a lawsuit in court. However, some experts contend that consumers face disadvantages at arbitration.

Here's the statement from AT&T's terms of service:
“You agree that, by entering into this Agreement, you and AT&T are each waiving the right to a trial by jury or to participate in a class action. This Agreement evidences a transaction in interstate commerce, and thus the Federal Arbitration Act governs the interpretation and enforcement of this provision. This arbitration provision shall survive termination of this Agreement”
AT&T has gotten wind of this wireless contract information and has released a statement via SlashGear to counter it. The carrier expressed that the arbitration clause in its terms of service has been this way since January 2001.

Here is AT&T's response:
AT&T has not recently made any changes in its terms of service regarding our arbitration clause. This approach has been in effect since Jan. 2001. We have made changes to our arbitration clause – most recently in Jan. 2009 – but those changes have been to the benefit of the consumer. It is worth noting that this approach – an arbitration clause with a class action waiver — is standard for the wireless industry.
We continue to believe that a consumer is better off pursuing a claim under our arbitration clause, rather than pursuing a class action. Arbitration is typically a fast, cost-effective, and pro-consumer way to address disputes, and AT&T’s arbitration agreement is among the most consumer-friendly in the nation.
A federal judge in West Virginia, even before recent improvements to AT&T’s arbitration policy, praised it as “unusually consumer-centered.”
Our current arbitration clause calls for the company — if it does not settle a consumer complaint and the consumer receives an award that is greater than the company’s settlement offer — to pay the greater amount of either the arbitration, or $10,000. This is what changed in Jan. 2009; previously the amount was $5,000.
Likewise, if the consumer has used a lawyer in winning an arbitration case and is awarded more than the company’s settlement offer, the company would pay two times the lawyers’ fees. Finally, we pay the entire cost of the arbitration, except if a customer is claiming $75,000 or more.
In short, we are confident our approach is both fair and in the best interest of our customers.
Well, this is certainly interesting. AT&T contends that it has done nothing wrong to its customers. Some experts also say that this clause is ineffective in preventing class action suits. Some state courts have decided to dismiss this waiver but it has also been upheld in some states.

That's it for this post on T&T changing its wireless contract. Tune in to this blog to get more news and info on mobile phone contracts.

1 comment:

Fawad Tariq said...

Dealer’s Choice Inc. (DCI), began in 1990 providing services and partnering with automobile dealerships to maintain customer loyalty and enhance profitability. DCI provides auto dealers with tools and products that enable them to stay in touch with their customer base while providing quality Finance and Insurance products to increase their profit marginService ContractsOur Dealer clients maintain their ongoing relationship with Dealer’s Choice, Inc. because at DCI we view each Dealer customer as if they are our own.