Illinois Deserves the Truth

It’s not all Doom and Gloom in Washington

The economy may be tanking, but not everything is so bleak in the capital.  Two important consumer bills recently passed out of their respective Senate committees.  Each would go a long way in protecting the health and rights of seniors:

• The Fairness in Nursing Home Arbitration Act (S.2838), which we’ve written about before, would end the unfair, mandatory binding arbitration agreements that many nursing home corporations use to escape accountability for negligent care.  It passed through the Senate Judiciary Committee.

• The other bill, which moved through the Senate Finance Committee, is the Herb Kohl sponsored (and Hillary Clinton cosponsored) Patient Safety and Abuse Prevention Act (S.1577).  This bill would establish a nationwide system of criminal background checks for people who want to work in nursing homes.

Pigs at the Trough!

Cross posted from The Pop Tort by Joe Consumer

So while average Americans struggle through tough economic times, corporate America continues to find new ways to loot the federal treasury! 

One way is “tort reform,” of course. It should be pretty obvious to all that proposals to limit public access to the civil justice system do not eliminate injuries or the need for compensation.  They merely shift the costs away from a corporate wrongdoer onto someone else - like taxpayers! 

Now it turns out, they’re not paying taxes either!  Time Magazine reports:

Two-thirds of U.S. corporations paid no federal income taxes between 1998 and 2005, according to a new report from Congress.

The study by the Government Accountability Office, expected to be released Tuesday, said about 68 percent of foreign companies doing business in the U.S. avoided corporate taxes over the same period.

Collectively, the companies reported trillions of dollars in sales, according to GAO's estimate.

"It's shameful that so many corporations make big profits and pay nothing to support our country," said Sen. Byron Dorgan, D-N.D., who asked for the GAO study with Sen. Carl Levin, D-Mich.

…

More than 38,000 foreign corporations had no tax liability in 2005 and 1.2 million U.S. companies paid no income tax, the GAO said. Combined, the companies had $2.5 trillion in sales. About 25 percent of the U.S. corporations not paying corporate taxes were considered large corporations, meaning they had at least $250 million in assets or $50 million in receipts.

Oh, and let’s give a special shout out to the credit card industry “which is poised to be the next big crisis (after housing) that banks have aided and abetted in US households.”  This industry not only wrecks people’s lives, it then takes away their recourse in the courts with mandatory binding arbitration!

Arbitration's Thin Line

A successful arbitration program in Madison County has some folks calling for more arbitration in place of courts.  This is one of those things that isn’t a problem until it becomes a problem.

Basically, the program in Madison forces individuals with complaints between $10,000 and $50,000 to bring their case to an arbitration panel.  After the panel makes a decision, the individual can either accept it or take the case to court.  Apparently, it has sped up the process for some, so it’s understandable why there'd be talk of expanding it.  However, there is a fine line between helpful arbitration programs like this, and "binding" arbitration that only deprives consumers of their rights.

As we’ve blogged about before, businesses increasingly insert binding arbitration clauses into consumer contracts.  These agreements force consumers to bring legal disputes before specified arbitration courts.  While the arbiters of these panels are often untrained or hand-selected by the businesses themselves, their judgments are final, meaning consumers have no way to access their fundamental right to a trial by jury.  Most of us have already agreed to some type of binding arbitration clause, perhaps unknowingly.  You can find them hidden in the fine print of credit card, automobile, and real estate agreements, employment contracts, insurance policies, and pretty much everywhere else (read this CJ&D white paper for more on binding arbitration).

The trouble is, Big Business refuses to acknowledge that binding arbitration is more hostile to consumers than Madison County-style programs.  That’s what makes the talk down there unsettling.

Federal lawmakers have the opportunity to combat the national trend of arbitration agreements by passing important bills such as the Arbitration Fairness Act (S. 1782 and H.R. 3010) and the Fairness in Nursing Home Arbitration Act (S. 2838 and H.R. 6126).  In the meantime, Illinois consumers and public officials need to be wary of this assault on our right to access the civil justice system.

Fairness for Grandpa

Cross-posted from The Pop Tort by Amanda

On Thursday the U.S. Senate Judiciary Committee will be meeting in Washington to discuss the Fairness in Nursing Home Arbitration Act.

Arbitration is a great way for corporations – in this case nursing homes – to get away with wrongdoing and never be held accountable in a court of law.  Listen to this NPR story that focuses on arbitration in credit card contracts, and makes the same point.

Thursday's bill, S.2838 was written to eliminate the growing practice by nursing homes requiring patients to give up their right to trial by jury as a condition for their admittance to a facility.

Your Bank Doesn't Tell You Everything, You Know

Take a look at this insightful clip from the Today Show: The Fine Print: 10 Secrets Your Bank Keeps.  Includes such nuggets as “For all the fine print, we don't disclose very much”, and “We change our interest rates all the time.”  The most important tip, however, concerns that Big Business standby—mandatory arbitration, or, the system that makes it almost impossible for consumers to hold companies accountable for wrongdoing.  The video below condenses the list; read the article for all ten.

Update: Scheduled Hearings on Arbitration Bills

Good news for Average Joe... a House subcommittee approved three bills that would help keep the court doors open for consumers who are abused and/or scammed by corporate wrongdoing.  The bills are:

• The Arbitration Fairness Act of 2007 (H.R. 3010)
• The Fairness in Nursing Home Arbitration Act of 2008 (H.R. 6126)
• The Automobile Arbitration Fairness Act of 2008 (H.R. 5312)

Each of the bills now moves on to the full committee for action.  See Public Citizen’s press release for more on this step in the right direction.

Meanwhile, in the other chamber, the Senate Judiciary Committee will take a look at their version of the nursing home arbitration bill (S. 2838) in a meeting scheduled for today.

Scheduled Hearings on Arbitration Bills

A subcommittee of the House Judiciary Committee scheduled hearings for today on three important consumer-related bills: the Fairness in Nursing Home Arbitration Act of 2008, the Automobile Arbitration Fairness Act of 2008, and the Arbitration Fairness Act of 2007.  Anyone who has been victim of unfair arbitration knows that consumers desperately need such bills passed.  Hopefully we start hearing positive developments this week.

Elder Abuse Awareness Month

Most people understand that elder abuse is a huge problem in Illinois.  Still, you can't help but feel stunned when you learn tragic stories like that of 77-year-old Ivory Jackson, who was beaten to death at his nursing home.  Events like this constantly remind us that we need to do more to protect nursing home residents from harm.  That's why Gov. Blagojevich's proclamation of July as "Elder Abuse Awareness Month"--just a few days after Mr. Jackson died--felt especially relevant to the times.

“Our seniors have the right to be treated with dignity, respect, and to feel safe and secure.  Unfortunately, many seniors find themselves victims of abuse and neglect which is unacceptable,” said Gov. Blagojevich.  “The sooner we know about a case of abuse, the sooner we can put a stop to it.  But in order to keep up the fight against abuse and neglect, we need everyone to do their part.  If you suspect a case of elder abuse report it.  Elder Abuse prevention will help keep thousands of seniors safe each year.”

Click here to learn more about the proclamation, which is part of the state's "Break the Silence" campaign.

Awareness efforts like this are crucial, but reporting abuse isn’t the only way to keep residents safe.  We need to make sure our loved ones and their families can have their day in court and hold abusers accountable for wrongdoing.  Our lawmakers can take a big step forward on this front by passing The Fairness in Nursing Home Arbitration Act in the House (H.R. 6126) and Senate (S. 2838).  Nursing homes increasingly rely on binding, mandatory arbitration hearings to take away the legal rights of abuse victims. This legislation would give victims back their rights and would hold abusers accountable to their victims.

Anti-Consumer Arbitration

Companies like to claim that mandatory arbitration is easy and unbiased (is this why they like to hide in it in so many contracts?).  This Business Week article pokes some big holes in that myth.  It focuses on credit companies and banks that use arbitration to collect debts from ordinary citizens, in particular one of the country’s largest arbitration firms, the National Arbitration Forum (NAF).  While the system is supposed to be neutral, consumers going up against a panel of NAF arbiters have virtually no chance of winning.

Some current and former NAF arbitrators say they make decisions in haste—sometimes in just a few minutes—based on scant information and rarely with debtor participation. Consumers who have been through the process complain that NAF spews baffling paperwork and fails to provide the hearings that it promises. Corporations seldom lose. In California, the one state where arbitration results are made public, creditors win 99.8% of the time in NAF cases that are decided by arbitrators on the merits, according to a lawsuit filed by the San Francisco city attorney against NAF.

Worst of all is how the NAF pitches its services to creditors.

Behind closed doors, NAF sells itself to lenders as an effective tool for collecting debts. The point of these pitches is to persuade the companies to use the firm to resolve clashes over delinquent accounts. JPMorgan Chase (JPM) and Bank of America (BAC) are among the large institutions that do so. A September, 2007, NAF PowerPoint presentation aimed at creditors and labeled "confidential" promises "marked increase in recovery rates over existing collection methods." At times, NAF does this kind of marketing with the aid of law firms representing the very creditors it's trying to sign up as clients.

Consumers who lost unfairly share some pretty shocking stories.  So do former NAF employees who left their posts because they had ethics.

William A. Gould Jr., a Sacramento lawyer with a general private practice, says he stopped handling arbitrations for the company after doing several in 2003 and 2004 because the process "just seemed to be pretty one-sided." He says he didn't observe specific instances of bias but became concerned about the imbalance between creditors and their law firms—which were highly sophisticated about NAF procedures—and most consumers, who were naive and lacked legal representation. "The whole organizational mechanism was set up to effect collections," Gould says.

This a must-read for anyone who has ever been in debt, so if you haven’t already clicked on it, do it here.  News like this just reminds us why the court system is so critical to keeping a level playing field for consumers.

Most Americans disapprove of binding arbitration

We've written before about the dangers binding arbitration agreements and how they take away our basic rights.  A new poll shows that consumers are aware this and disapprove.  Check out this AAJ release of a new national survey:

According to the polling, when consumers learn that the company picks the arbitrator, and they give up their right to take the case to court and binding arbitration applies even if they are seriously injured, 81 percent disapprove.

The poll also shows broad support for Congressional legislation called the “Arbitration Fairness Act” that seeks to protect Americans from abusive arbitration agreements.  The legislation would ensure that the decision to arbitrate be made voluntarily and after a dispute has arisen.

This is all the more reason for lawmakers to get behind important bills like the Arbitration Fairness Act and the Fairness in Nursing Home Arbitration Act.