The Federal Arbitration Act, enacted in 1925 was originally intended to help resolve marketable disputes between businesses. It is provided that the legal basis for the broad use of arbitration clauses in consumer contracts today. Obligatory arbitration has become standard business perform in many consumer contracts. They apply for loans, car leases, employment contracts, insurance and credit card applications.

WHAT IS MANDATORY BINDING ARBITRATION?

Arbitration is a process that seeks to decide disputes without official action. A formal law suit, which can hold a consumer liable, is replaced with expensive confidential justice system where high costs and neglect the law have been clearly acknowledged.

Arbitration is naturally biased and favors business, not consumers that is why it is used. Arbitrators usually contract with businesses against consumers who have claims brought against them. By prearrangement, most companies can go for the arbitrator and venue of a dispute. Moreover, arbitrators are provoked to rule in a way that will attract future company business to them.

The following are issues with the arbitration process:

* A single arbitrator or a panel, not a judge, decides disputes.

* Arbitrators are not ask to have any legal training and need not follow the law.

* Arbitration disputes are top secret and there is no right to public access.

* Their decisions may be legally inaccurate.

* There is practically no right to appeal for the consumer.

* Arbitrators make money from duplicate business of the companies in arbitration.

* Court rules of proof and procedure do not apply.

* Consumers are not allowed to the right of discovery or given due process.

* Forced arbitration violates your 7th alteration right to a trial by jury.

Consumers pay much more for arbitration dealings than they would for a public court proceeding. Arbitration fees can range between several hundred and thousands of dollars per hour. This can be prohibitively costly for a consumer who is already facing financial problems. Arbitration saves neither time nor money for the consumer.

I am not a lawyer and I am not giving legal advice. However, if it were up to me, I would not play a part in a binding arbitration process; the final decision is up to you though. If you choose not to participate, this will force creditors into court where the rule of law applies; your legitimate right to a trial by jury is intact and you are given due process. An award given to a creditor in arbitration is not enforceable unless they go to court and get a judgment. Arbitration is used as a scare scheme to coerce debtors into paying.

I would like to make obvious that I am not endorsing the idea of trying to escape your financial obligations, just the process of compulsory arbitration. I think that if a creditor wants to take legal action against you, it should be done if a court of law. It should not be done in an arena that favors big business and finance. In a court of law, the playing field is level and both parties have a chance to present their side of the story to a impartial third-party.