House passes Rep. Flaherty’s consumer protection legislation
Bill provides transparency, protocols for mandatory binding arbitration

AUGUSTA – The Maine House of Representatives gave initial passage Wednesday to legislation sponsored by Rep. Sean Flaherty, D-Scarborough, that would protect consumers involved in mandatory arbitration contracts.

The bill requires arbitrators to disclose information about past arbitrations and the arbitration process on their Web sites. Mandatory arbitration clauses are often found in the fine print of many contracts for credit cards, cellular phone, and car purchases. They require consumers to settle disputes outside of court through an arbitrator.

“Most consumers are not even aware that they are bound by mandatory arbitration agreements,” said Flaherty.  “The passage of this bill will help protect consumers by giving them more information about arbitration and particular arbitrators, should they enter the process.”

Starting Jan. 1, 2011, those who conduct consumer arbitrations will be required to have a Web site, which will provide consumers with information including: the cost and fees of arbitration, types of disputes they have been involved in, if the consumer was the prevailing party, if attorneys were involved and the amount of an award given, if any.

“This bill protects both the consumer and businesses alike, by placing the burden on the arbitrators to provide Maine consumers with this information.” said Flaherty.

The bill underwent significant negotiations during the past year resulting in strong bipartisan support for the legislation.

The bill, L.D. 1256, faces further votes in the Senate. More information can be found at http://www.mainelegislature.org/LawMakerWeb/summary.asp?ID=280035549 .