Democratic AG steps up to protect Americans from corporate fraud enabled by permissive GOP

Over the years, corporations have slipped hidden language into numerous contracts that strip consumers of legal rights, often without their knowledge. One common method is forced arbitration, in which people waive their right to sue, and instead must submit complaints to a private panel of arbitrators who may be biased in favor of the company.

The Obama administration spent years curtailing this practice as an abuse of consumer rights, but the Trump administration is seeking to undo much of that work. In August, for instance, Donald Trump scrapped a rule that guarantees families the right to sue nursing homes for negligence and abuse.

And Republicans have led the charge against a rule that prohibited financial services companies from inserting forced arbitration clauses into customers’ contracts.

But Democrats like New York Attorney General Eric Schneiderman are still fighting to protect consumers from the harmful practice of forced arbitration.

Last week, credit reporting giant Equifax announced that a data breach compromised the personal information of as many as 143 million Americans, including birthdays, Social Security Numbers, addresses, and driver license numbers.

Amidst the confusion, some observers noticed a clause stealthily inserted into the company’s cybersecurity products:

https://twitter.com/zackwhittaker/status/906178254331142144

This is an outrageous abuse of monopoly power. Equifax, which is such a gigantic company that most people have no choice but to interact with them, was not only careless with user data — it sought to block those users from the right to seek relief in court for the company’s negligence.

Furthermore, it took Equifax weeks to even alert the public about the breach, and in the meantime, “Three of its top executives sold large blocks of stock days after the company discovered the breach.”

“Equifax told CNNMoney that the sales were just a ‘small percentage’ of what these executives own and that they all ‘had no knowledge that an intrusion had occurred’ when they made the sales.”

Schneiderman, upon learning of the forced arbitration clause, immediately promised the public he would get answers and hold Equifax accountable:

https://twitter.com/agschneiderman/status/906195350532304896

The pressure worked. Tuesday, Equifax caved and promised no customer seeking information about the data breach would waive their right to sue:

https://twitter.com/agschneiderman/status/907686076197818369

Schneiderman’s actions helped secure a badly needed victory for consumers.

Trump and the GOP may continue to dismantle regulatory protections at the federal level, but Democratic state prosecutors like Schneiderman are still here to pick up the slack and fight for the people.