The 1998 Consumer Due Process Protocol had focused on
• Consumers made a knowing and informed
decision regarding the use
• ADR providers and neutrals were independent,
impartial and fairly selected and that neutrals
were qualified and competent and subject to
monitoring and evaluation for compliance with
applicable rules and standards;
• Hearing procedures were convenient,
expeditious, adequate and fundamentally fair;
• All substantive legal and equitable remedies for
consumers remained available.
The AAA’s 2010 Consumer Debt Collection Due Process Protocol enhanced these protections to address FTC concerns. The
additional due process provisions included:
• Ensuring consumers had access to information
concerning ADR processes and made knowing
and informed decisions;
• Enhanced requirements for notifying consumers
of arbitration claims;
• Requirements that claims be filed with
• Procedures for identifying time-barred claims;
• Recommendations for including mediation as a
step in the dispute resolution process.
In 2014, the AAA issued Consumer Arbitration Rules, which
replaced the Supplementary Procedures for Consumer-Related
Disputes previously in effect. The Rules by their terms applied
when a “business has a standardized, systematic application of
arbitration clauses with customers and where the terms and
conditions of the purchase of standardized, consumable goods
or services are non-negotiable or primarily non-negotiable,”
including credit card and other consumer financial agreements.
The Rules preserved consumers’ rights to proceed in small claims
court and also provided that companies wishing to use AAA
arbitration services had to submit their arbitration agreements
in advance to AAA for review to determine compliance with the
Due Process Protocol. The AAA would only arbitrate cases aris-
ing under approved agreements. In addition, an on-line registry
of approved agreements was established. The AAA capped filing
fees for consumer disputes at $200, and the Rules authorized
arbitrators to award such fees to consumers who prevailed on
their claims. The Rules also provide for flexibility, permitting
proceedings based on documents, telephone hearings or live
hearings, depending on the size and nature of the case.
PRE-DISPUTE ARBITRATION CLAUSE ISSUES
In 2010, Congress, also responding to perceived consumer
abuses in the financial services industry, passed the Dodd-Frank
Act creating the Consumer Financial Protection Bureau (CFPB).
The Act directed the CFPB to conduct a study on the use of pre-dispute arbitration clauses in consumer finance agreements and
to regulate or prohibit the use of such clauses if it determined that
so doing was “in the public interest and for the protection of consumers.” This represented a potential carve-out to the overriding
federal policy in favor of arbitration established by the Federal
The CFPB issued preliminary findings in 2013, based in part on
a review of AAA consumer arbitrations from 2010 through 2012,
and its final report in March, 2015, based on the same data. (Of
note, the CFPB did not include online arbitrations in its study). The
CFPB described its study as follows:
The present study is empirical, not evaluative. Al-
though the report covers a wide range of topics, its
uniform and consistent focus is on understanding the
facts surrounding the resolution of consumer finan-
cial disputes — both in arbitration and in the courts —
through a careful analysis of empirical evidence.
The report’s Table of Contents identifies the topics it addresses:
Section 2 How prevalent are pre-dispute arbitration
clauses and what are their main features?
Section 3 What do consumers understand about
dispute resolution systems?
Section 4 How do arbitration procedures currently
differ from procedures in court?
Section 5 What types of claims are brought in
arbitration and how are they resolved?
Section 6 What types of claims are brought in
litigation and how are they resolved?
Section 7 Do consumers sue companies in small
Section 8 What is the value of class action
Section 9 What is the relationship between public
enforcement and consumer financial class actions?
Section 10 Do arbitration clauses lead to lower
prices for consumers?