Hacker News Re-Imagined

So I took a corporation to arbitration

  • 986 points
  • 1 month ago

  • @snapetom
  • Created a post

So I took a corporation to arbitration


@DeathArrow 1 month

Replying to @snapetom 🎙

In my small Eastern European country the best way to solve litigations with companies as a consumer is to use Customer Protection, which is a state agency.

To give an example, on Black Friday, some big online retailer had an offer on this site. I bought something with card and in two hours they called me to apologize that they didn't have it in stock, and they retired the product from the online store.

But next morning, the product was back in the online store, with a greater price.

I phoned, the retailer and demanded my purchased product at the payd price. They denied and offered a refund. I told I will appeal to Customer Protection and they said they still won't honor my order.

I emailed Customer Protection with proofs, screnshots and they forced the retailer to send me the product for the payd price, and also gave them a big fine.

The moral of the story is that a customer has to fight for his rights, by whatever means are legal in his country.

If I had time, I would have made an interactive app for consumers to vote for good behaving companies, bad behaving companies, add proofs for everybody to be seen and try to pressure the companies to behave good.

Reply


@trey-jones 1 month

Replying to @snapetom 🎙

Regarding the salient point of "Don't buy a home warranty":

I guess it should always have been obvious that the most profitable product to sell is "nothing", AKA most types of insurance and warranty. At this point it's optimized to the point of the computer telling customer service peons whether it's "worth" entertaining your claim. Ethics and actual customer service have gone out the window.

Reply


@goindeep 1 month

Replying to @snapetom 🎙

Haha I used to work for a hot water company and this type of thing was pretty common. Doesn't bring back fond memories. So glad to not be doing that shitty job.

Reply


@unknownus3r 1 month

Replying to @snapetom 🎙

How come you never show them the evidence? Is it because it lets the lawyers concoct a story?

Reply


@NaturalPhallacy 1 month

Replying to @snapetom 🎙

>a privatization of justice.

More and more I'm starting to think that anything that isn't just "justice" is injustice.

Reply


@bsedlm 1 month

Replying to @snapetom 🎙

> I was very impressed that this company so effectively neutered all staff that had any contact with customers.

I'm fascinated by the separation of them who do something (the company's employees), them who run it (i.e. who tell said employees how to work), AND them who actually own the company.

It's been mind-blowing to me how for all large-enough companies, the people who own it have no say at all in how it's run. and the people who run it (the managers or "executives"/bureaucrats who curiously do not actually peform the productivity-creating labor) cannot be really held liable for what the company does for it's only their job, the owners are liable, but they have no say (nor interest really) in how it's run, they just want them dividends/rent.

in this scenario, the giant multinational corporations are essentially skynet; i.e. rogue, unaccountable/never liable group of autonomous entities made mostly out of money.

Sometimes I like to imagine that on some level of companies who own other companies, there already exist groups of companies that own each other, such that if you followed the trail of ownership you'd go around a cycle.

Reply


@sequoia 1 month

Replying to @snapetom 🎙

@snapetom (author): what caused you to counter-offer 80% rather than sticking with 100%? Presumably expediency, but it seems with arbitrator on the line you were well on your way to a 100% payout.

Reply


@cosmotic 1 month

Replying to @snapetom 🎙

Forced arbitration can be a double edged sward for the corporations too. A while back, a company filed a motion to dismiss a class-action case because everyone signed arbitration agreements. The judge denied the request and forced the company to start an arbitration process with each member of a class, which was MUCH more expensive for the company to deal with than treating the class as a single entity.

Reply


@mig39 1 month

Replying to @snapetom 🎙

> In the US, it’s not easy to sue a company as a customer.

My experience in Canada:

- I successfully sued a large retailer (something mart) over a $60 mistake, that ended up costing them a lot more in small claims court.

Just dealing with the company was insane. Literally yelling at me on the phone that they were never going to pay for a simple mistake. I literally said "well, if you're going to yell at me, let's at least do it in front of a judge."

It was really easy to file the papers, and even serve them myself. The court people helped. The company denied, denied, denied. Day of the case, literally 5 minutes before it was set to start, they agreed to pay everything I asked for (including 2 days of my time), but wanted me to sign a non-disclosure agreement. Which I did.

- Second case, it was one of Canada's largest banks. Error on their part, cost me $1000+ in extra expenses. Fought me the whole way, didn't want to pay anything at all. Went through their internal ombudsman process, but never got anywhere. A few days after filing a claim in small claims court, they gave me everything I asked for. Again, wanted me to sign a non-disclosure agreement.

So I tell everyone I know, that in Canada, the big corporations are more afraid of courts than anything else. Last thing they want is a public record of wrongdoing.

Reply


@ewuhic 1 month

Replying to @snapetom 🎙

What would be the analogous process in EU (Germany, specifically)? And does it fall under Zivilrecht?

Reply


@gnicholas 1 month

Replying to @snapetom 🎙

For anyone else dealing with home warranty companies, you should also try contacting your state's regulators. In CA, this is the Dept. of Insurance. They helped me immensely with a situation where the repair person actually broke something but was unwilling to come back and fix it.

The home warranty company refused to call me back and it was impossible for me to get through inbound. But the DOI employee was able to contact them, and that was all it took. She followed up several times to make sure the situation was completely resolved.

Reply


@rascul 1 month

Replying to @snapetom 🎙

Is it just me or do others also find "hot water heater" to be a strange term? To me it's just a "water heater".

Reply


@Tabular-Iceberg 1 month

Replying to @snapetom 🎙

> Trying to find someone at HWC who could show an iota of free-will and thinking was hilarious and impossible.

Since this is such a common pattern when interacting with any kind of customer support I'm interested in exploring why this is.

The solution seems trivial enough. Write down the customer id, date, time and what was pre-approved on a piece of paper. Then when the computer comes back up, enter it into the system.

Maybe the call handlers were just lazy and thought they could use the outage as a break. But you would think that bickering with customers on the phone is a lot more draining and annoying than just keeping business flowing.

Maybe the software didn't allow recording events that had already happened, like the date and time field wasn't editable. Did the developers think that their system was infallible and would never go down? Or did they ask the domain experts if they should make this provision, and it was rejected?

If so, what was the motivation of the domain experts? Did they think that their developers and IT infrastructure was infallible? Or did they not trust the call handlers enough to make the date and time field editable? Or do they take delight in finding loopholes where they can shirk their contractual obligations?

Reply


@VBprogrammer 1 month

Replying to @snapetom 🎙

> 3) Keep records of phone conversations. Date, time, who, resolution. Keep screenshots. Keep emails.

If you take nothing else away from this article this a great point.

I once had an issue where two different electricity companies believed they were supplying our University flat. This turned out to be due to the mess of naming systems involved in Edinburgh flats where two apparently identical flats had meter numbers. Eventually I was able to extract this information from the call handlers but only after a ridiculous number of calls.

This got far better when I started taking names and extension numbers so that I could skip the intro session on each call and speak directly to someone who knew the situation. Taking careful notes of who I spoke to and when.

For about 2 years later I'd still get the hard sell from some debt collectors telling me that I could just pay the £2000 and it would all be over...

Reply


@baryphonic 1 month

Replying to @snapetom 🎙

I loved the thrust of this overall post, but I had thoughts about this paragraph:

> In the US, it’s not easy to sue a company as a customer. Maybe about thirty years ago, it became common for companies to put into contracts and terms of service, clauses that required binding arbitration to resolve disputes. This was cheaper for the company in many ways including a streamlined resolution process, cheaper lawyers, no sifting through frivolous lawsuits, and finality once a decision is made. It sucked for the consumer because it’s essentially a privatization of justice.

The anti-arbitration vie of so many people has always struck me as odd. Wouldn't a "streamlined resolution process, cheaper lawyers, no sifting through frivolous lawsuits, and finality once a decision is made" benefit consumers at least as much as large corporations? The biggest downside seems to be lack of an appeals process, even though very few court decisions are overturned on appeal anyway, and in any case, the small claims type of actions would never be appealed due to cost.

From what I can tell, the poster filed his claim online, provided very little evidence beyond alleging the specific contract sections that were violated (though I'm certain he had copious evidence if asked), and recovered almost all of his damages. The arbitration association even provided someone to follow up throughout the settlement process. IANAL, but I doubt any process in the entire country is so easy, and from what I've seen in class actions, the arbitration damage award was much, much higher.

The difference between how easy the process was and the author's expectations is so stark that I almost wonder if the corporations themselves started the rumor about arbitration being terrible, if not the trial lawyers themselves.

Reply


@sudden_dystopia 1 month

Replying to @snapetom 🎙

This is interesting, thanks for sharing and good work!

Reply


@KingOfCoders 1 month

Replying to @snapetom 🎙

"Of course, they refused to pay. Trying to find someone at HWC who could show an iota of free-will and thinking was hilarious and impossible."

Not sure if this was in the US, but whenever I was there, I was astonished by the little amount of free-will employees have.

I wanted to see a different hotel room for our next stay. Here in Germany someone would take me to the room and show me. There (NYC, good hotel) the receptionist needed to ask a manager who needed to ask a manager - in the end it was not possible.

Reply


@DeathArrow 1 month

Replying to @snapetom 🎙

Is arbitration used as a way to solve litigations between corporations and consumers, generally used just in US?

In my European country, arbitration is scarcely used and when it is used it implies just businesses.

Reply


@gambiting 1 month

Replying to @snapetom 🎙

>>and about two days later, got a Fed-Ex’ed check in the mail.

I often wonder, how much time and fuel is wasted on this nonsense in the US. Couldn't they have just.....sent him the money directly? You know, like in literally every other country in the world?

Reply


@junon 1 month

Replying to @snapetom 🎙

Enjoyed the writeup!

> The world doesn’t care about you feeling like you were wronged and how hurt your feelings were. It wants cold, hard facts.

This has been somewhat of a guiding light for me for quite a long time, hammered into my by my attorney father, and it alone has saved me countless times.

Reply


@dlandis 1 month

Replying to @snapetom 🎙

Great write up, but I would also be interested to learn what the total number of hours was that the author devoted to this case, including all the phone calls, email, research, preparation, etc.

His main takeaway was to not be afraid of the arbitration process, but unfortunately the time commitment itself does seem very significant, even in a relatively straightforward case like his.

Reply


@imglorp 1 month

Replying to @snapetom 🎙

Side rant:

> 4) Don’t get a home warranty.

Sellers are basically obligated to provide them, because it's what everybody does. They serve to lubricate a deal with a checkbox, while releasing the seller from some obligations.

I'm pretty sure selling RE agents get a percentage on referrals (in US). I sold a house without an agent and phoned one of these companies to simply buy a warranty to hand to my house buyer. They were baffled how to do this without my agent id number until some manager said just sell it to him.

The whole thing is a reception line of parasites waiting for some homebuyer blood.

Reply


@prakhar897 1 month

Replying to @snapetom 🎙

IMO the author could've elaborated in the email on how the company is deliberately trying to deny their responsibility for the actions and how the arbitration clause is added in bad faith and has created a dark pattern which harms the consumers nationwide. This means (I'm not a lawyer) the person on the other side might get scared about a class action suit.

Reply


@AlbertCory 1 month

Replying to @snapetom 🎙

Great job.

Counter-example (missing nearly all the details, unfortunately, to protect privacy): a friend filed a wrongful termination claim, which went to arbitration. The defendant stretched it out for two years, which I consider a transparent attempt to bankrupt him with legal fees. Finally they settled, but even after the agreement to settle, it still dragged on. Eventually it ended.

Reply


@giantg2 1 month

Replying to @snapetom 🎙

Did this actually go to arbitration? It sounds more like they filed an arbitration case but that the company settled before going to arbitration.

Reply


@jsjohns2 1 month

Replying to @snapetom 🎙

Lest anyone come away from this thinking that arbitration is good for the consumer, this story only has a happy ending because the business chose to settle.

I also took a corporation to arbitration. A Big 4 bank destroyed my credit over a billing mistake that was their fault, relating to a credit card account with a $230 balance. Despite seeking nothing more than to have my credit fixed, the bank refused to settle. I contacted upwards of 100 attorneys with no luck, so decided to self-represent.

16 months, 25 hours under oath, and over 2,000 hours later, I "won" a judgement forcing the bank to fix my credit -- but no monetary recovery at all.

Reply


@deepsun 1 month

Replying to @snapetom 🎙

> Keep records of phone conversations

How do you record the phone conversations?

I remember Android doesn't really allow you to record the other party audio, only your own. Unless you write your own caller app that processes the audio, but not sure how easy it is to send the audio to default phone caller after. Apple probably does it too.

Reply


@jeffrallen 1 month

Replying to @snapetom 🎙

I love it.

Contacts are awesome. I got humanitarian aid logistics training and the teacher taught us: always make a written contract, for any agreement. You don't need to be a lawyer to make a useful contact. The process of writing and signing it clarifies the situation to you and the counterparty. Most disagreements can be solved in informal arbitration, especially when one party can show, look we agreed to this and then I did this and you did that. Humans do better removing emotion and ego when there's some rules written down.

I also faced a situation where the contract a former logistician had entered into had become wildly unfair to the vendor, not through his fault. He started giving me problems and I offered to break the contract and find a new compromise that met my needs and his. Happiness all around, for a small amount of reasonable, ethical cost to my organization.

Reply


@1970-01-01 1 month

Replying to @snapetom 🎙

This was an excellent write-up! The TL;DR is perfect:

1) Don’t be afraid of arbitration. I did feel AAA was helpful in the process. In fact, heading straight to arbitration may be the best way to fight this system that corporations created.

2) READ. YOUR. CONTRACT. I swear, this got me like 90% there. It doesn’t matter that I don’t have a background in contract law. These customer contracts are designed to be (relatively) approachable. I felt being able to specifically point out what clauses were violated and how gave me a very strong cause of action. I also pointed out there was no out-clause in the contract for computer system failures. I suspect this had something to do with them accepting my counter-offer so quickly. Once the attorney saw that yes, there were breaches of contract, they probably knew my case was pretty strong. The world doesn’t care about you feeling like you were wronged and how hurt your feelings were. It wants cold, hard facts.

3) Keep records of phone conversations. Date, time, who, resolution. Keep screenshots. Keep emails. I didn’t have to present them to an arbiter, but I think if I had to, I had the evidence to point out exactly where HWC failed.

4) Don’t get a home warranty.

Reply


@akudha 1 month

Replying to @snapetom 🎙

I just read some of the clauses in my contract for a new job that I am starting (I am a "sub-contractor" here). The amount of legalese, the amount of one sided items there ... it is insane. It left me wondering if the lawyers that write these contracts have an iota of empathy or conscience. If I were to summarize the contract in one line it would be "we owe you nothing, you owe us everything".

And this is for a low level, software job. Software that doesn't touch (as far as I know) anything secretive like the military. Just some run of the mill web CRUD app.

Maybe I am too sensitive, but why have we become so litigious? I understand people need to cover their ass, but some of the clauses are so egregious. Same with my lease agreement. Reminds me of this Carlin rant - https://www.youtube.com/watch?v=VFl84lGveQs

Reply


@willyt 1 month

Replying to @snapetom 🎙

This is my experience in the UK. If you are party to a contract and due to the failure of the other party to adhere to the terms of the contract you are out of pocket the other party needs to put you back in the position you would have been in had the breach not happened. Hence, you can charge for your time in writing letters and submissions to small claims court etc because that is time spent which wouldn’t have been spent if they had performed thier contract. Therefore I always state my hourly rate and how much time I’ve spent so far when dealing with intransigence from companies. I had a fault in my electricty meter and was over charged by £2000. I spent hours on the phone and they didn’t do anything to resolve the problem until I threatened small claims court at which point they refunded me and offered £250 compensation. compesation for my time. Maybe justice doesn’t work like this in the US, but I reckon he probably could have got more from this company.

Reply


@soorya3 1 month

Replying to @snapetom 🎙

Also there may be other ways to recover the money for example local and federal law related to your problem (simply google them). In my case, Travel company customer service failed to cancel my flight and after months of following up (although slowly because most of us don't have time and energy to spend) finally I filed a case with DOT (federal law) and I got my money within few weeks. Another great resource is consumer protection bureau (https://www.consumerfinance.gov/).

Reply


@ddeck 1 month

Replying to @snapetom 🎙

Just in case it's helpful to anyone, I had a good experience using the CEDR Aviation Adjudication Scheme[1] to challenge Easyjet's refusal to pay up under the EU flight delay compensation scheme [2].

The EU has a mandatory compensation scheme for for passengers where flights are late, cancelled, denying boarding etc. This applies not only to EU citizens and airlines, but to all flights flying from or to the EU.

I had an Easyjet flight that was delayed for hours, then cancelled overnight, requiring a hotel stay etc. After lodging the claim with the airline, they responded that the delay, then cancellation was due to extra ordinary reasons (weather) and as such they weren't responsible.

The CEDR scheme requires a payment of about EUR30, which is not refundable if you lose and the airline needs to be a member of the scheme, but many are.

Easyjet were required to provide evidence of the extraordinary circumstances, and they ended up submitting a long story about the plane being delayed due to severe storms on a prior flight in France, along with the associated documents.

That turned out to be true, but the tail number on the plane that was delayed was a completely difference aircraft, and they were forced to pay the full compensation, which amounted to near EUR1k.

The whole process took several weeks, but it didn't require me to be present in the EU and was done entirely via the CEDR website.

[1] https://www.cedr.com/consumer/aviation/

[2] https://europa.eu/youreurope/citizens/travel/passenger-right...

Reply


@andrew_ 1 month

Replying to @snapetom 🎙

Conversely, don't be afraid of aftermarket vehicle warranties (in the US, and after you've vetted them). Perhaps a YMMV moment, but I've had a very positive experience surprisingly.

Reply


@pseingatl 1 month

Replying to @snapetom 🎙

I don't understand why so many people are afraid of arbitration either. Filing fees are lower. Documentation required to file is easier.

Federal courts are drug courts. Wait in line. Motion practice is discretionary.

State civil courts are backlogged. Lawyers will file delaying motions to wear you down. You must know what you are doing. The response to a complaint is not an answer, it's a motion to dismiss w/request for sanctions and fees.

In roughly half the States, judges are elected and draw campaign funds from the attorneys who appear before them. You didn't contribute? Back to the end of the line.

AAA arbitrators are often retired judges anyway. The process is easier. There are some negatives but these do not outweigh the pain of a state or federal civil case.

Reply


@bjarneh 1 month

Replying to @snapetom 🎙

> Of course, they refused to pay. Trying to find someone at HWC who could show an iota of free-will and thinking was hilarious and impossible.

This always annoys me; a 100 sellers for every person working in any type of customer care/support role seems to be the norm. If you can actually get in contact with someone in customer care/support their job always seem to be to brush you off nicely, not really help you.

Reply


@thelittleprince 1 month

Replying to @snapetom 🎙

Just curious. What if you failed the claim? Let's say OP didn't hire an attorney, would he/she has to pay anything to the company for a false claim?

Reply


@kevin_thibedeau 1 month

Replying to @snapetom 🎙

Just an FYI. You should check the terms for arbitration in service contracts. A fiber ISP in my area permits you to opt out if you notify them within 30 days of beginning service.

Reply


@guerrilla 1 month

Replying to @snapetom 🎙

> In the US, it’s not easy to sue a company as a customer. Maybe about thirty years ago, it became common for companies to put into contracts and terms of service, clauses that required binding arbitration to resolve disputes. This was cheaper for the company in many ways including a streamlined resolution process, cheaper lawyers, no sifting through frivolous lawsuits, and finality once a decision is made. It sucked for the consumer because it’s essentially a privatization of justice.

It seems insane that people are just fine with this. There's not even a top comment here mentioning it at this time. Is there no movement to make this illegal at all?

Reply


@gtirloni 1 month

Replying to @snapetom 🎙

> a Fed-Ex’ed check in the mail.

It's mind-blowing to me how the US still relies heavily on these.

Reply


@maccard 1 month

Replying to @snapetom 🎙

> In the end of my response, I counter-offered 80% plus arbitration filing fee reimbursement. The next day, they responded back with an acceptance and sent over a release form. Case pretty much closed.

This is so depressing - it cost him $200 to get to the point of arbitration in the first place (lucky for him that he had $200 to file it in the first place), _and_ he didn't even get the total amount back, he get less than $1500 rather than the $200 he likely should have got.

For anyone who claims "just take them to court" or "just sue them for breach of contract" - this is what you're looking at, getting back 75% of what you expected after paying for their complaints procedure.

Reply


@tomcam 1 month

Replying to @snapetom 🎙

Damn, that was helpful and encouraging. Pound for pound the best value of any article I have read on HN.

Reply


@puffoflogic 1 month

Replying to @snapetom 🎙

This doesn't look like a win to me. When insurance companies (and equivalent products) pay a claim through legal action, even if it were 100% of the claim, they have won. That was all they were ever obliged to do and they got to put it through a filter first, where they benefit from filtering even a small fraction of claims (and in reality it's a large fraction). Sound legal principles demand double or treble damages for every litigated insurance claim to prevent this hazard.

Reply


@SkeuomorphicBee 1 month

Replying to @snapetom 🎙

> It went pretty well.

...

> [...] I counter-offered 80% plus arbitration filing fee reimbursement. The next day, they responded back with an acceptance and sent over a release form. Case pretty much closed. I didn’t get 100% back, [...]

So author had to jump through hoops and in the end only got a percentage of what was owed. The text is written in the format of a feel-good success story, but the result is the oposite. What is described is a broken system, if the only punishment for the crime is to do what they should have done in the first place then there is no incentive for companies to do the right thing to begin with. Customer protection laws absolutely need a clause for double the reimbursement and I'm shocked that this person's country (I'm assuming it is the USA) doesn't have it. Without such a clause it is best for the company to just deny ALL claims and profit out of the people too lazy to go through arbitration.

Reply


@TrackerFF 1 month

Replying to @snapetom 🎙

In my experience, lots of companies have more or less automatic denial on requests. This is to filter out those that simply give up on step 1. Then the same companies will, like OP points out, offer some % in reimbursement / whatever to those that bother to appeal the initial denial. It's a disgusting practice, IMO - but what can you do?

A bit OT:

But ESPECIALLY the rental market - professional or private - is horrible on this. Before purchasing my home, I had rented 7 different apartments over the years.

No mater how thorough I'd be on washing out apartment, or how careful I'd be with it, they would always find something - and claim deductions on the deposit.

This worked for the first apartment I rented - after that I got wiser, and took pictures of everything before actually moving in. Better yet, with the landlord or representative as witness. Document everything. I even recorded the phone conversation - informing that the conversation would be recorded, and if that was a problem, we'd take everything in writing.

This saved me lots of deposits. Like clockwork, I'd be informed that they found something - sending evidence. I'd reply back with my evidence, and suddenly everything's OK.

Reply


@patwolf 1 month

Replying to @snapetom 🎙

A home warranty was included with a home I purchased back when it was a buyers market. I did end up using it to replace an entire AC unit. Fortunately the process was surprisingly smooth. They required me to pay a few fees out of pocket, including a refrigerant disposal fee, which was funny because all the refrigerant had already leaked out. I tried to argue with them about that but gave up because it was a small price to pay for a new AC.

Even though I had a good experience, I think it's better to save up an emergency fund for home repairs rather than rely on a warranty.

Reply


@reledi 1 month

Replying to @snapetom 🎙

Is there a term for these denial of service tactics that many organisations employ?

E.g. not having the authority, being the wrong person and sending you in another direction, putting the onus on you to move things forward, not responding to emails and calls, ignoring questions and selectively answering, not making contact details or policies available, and so on.

Reply


@not2b 1 month

Replying to @snapetom 🎙

The "don't get a home warranty" advice doesn't always apply. When buying a house that you know has issues, a warranty that covers issues found in the first year almost always pays for itself, it has the last two times we bought a house. I wouldn't get a longer-term deal though.

Reply


@michaelcampbell 1 month

Replying to @snapetom 🎙

FWIW, we've had a home warrantee for... 17 years, and it has been a positive ROI every year. We're dropping it now because the service has gone to shit being no longer maintained in my country and all they do is read scripts to you.

Reply


@bgribble 1 month

Replying to @snapetom 🎙

> Remember, I purposely withheld detail and evidence in my filing, and yet I was offered a quick settlement. I would love to see the math that goes into this strategy.

I've never done arbitration, but I did pursue legal action against a contractor that defrauded me and I think the logic is basically the same.

Lawyers are constantly evaluating the cost (to their client) of further pursuing a claim vs the likelihood of succeeding. They know how much it will cost in time if it goes all the way to litigation/arbitration, and they have a fair idea what the outcome will be, but it's uncertain. They are always going to try to settle long before the end-game unless they are trying to make a point and it's worth wasting a bunch of money on.

In my case, my lawyer was very convinced that they were likely to settle for an amount basically up to about 75% of the amount it would cost to litigate. My claim was solid (he DID defraud me) but there was some possibility that a trial would find otherwise, so it was better for them to settle up to the point that it became worthwhile to roll the dice.

The emails between their lawyer and mine were about details of the dispute, not about the financial calculation I outline above, but that was just window dressing; the real decisions were made based on how much it would cost to litigate vs how much they would pay to settle.

The only place the facts of the fraud even came into it were as part of the calculation of how likely we were to prevail in court, but it was not at all precise; more like "given the facts, we are pretty likely to win but not certain".

Reply


@Aeolun 1 month

Replying to @snapetom 🎙

What I think is most surprising in this whole thing is that the company had a clause somewhere in the contract that they could break at all.

Normally these things are written so that it’s impossible for the company to do anything wrong (at least all the ones I’ve ever read).

Reply


@irrational 1 month

Replying to @snapetom 🎙

> 4) Don’t get a home warranty.

But, what about an extended car warranty?

Reply


@jwmoz 1 month

Replying to @snapetom 🎙

What is the UK equivalent of this?

Last year a phone company wrongfully added a credit to my account for 900gbp which I noticed had been there for a while, claiming I owed for a phone. It was actually an identity fraud issue. I had forgotten when it had happened and never checked my credit scores, but then during the year needed credit and was getting declined so noticed on checking.

I contacted them and they flat out refused to remove it essentially implying I was lying. It happened with multiple phone companies at the time and I contacted them back then and they removed it apart from Three. I even contacted Vodafone for my records and they refused to help.

I escalated it multiple avenues such as credit agencies and ombudsman and none could help so ultimately was stuck with this charge. I contacted Three, the managers and CEO and was ignored.

So I had no other options (perhaps legal route which I know nothing about) and had to let the credit on the account close after 6 years.

The time spent on it and frustration was awful.

Reply


@andjd 1 month

Replying to @snapetom 🎙

So, since the author was only asking for a few thousand dollars, it's probably not worth the company fighting it -- it's just a matter of them quickly finding out how much money they have to give you to make you go away. The exact series of events would probably have occurred if he had filed in small claims court. Even though the company could likely win a motion to compel arbitration, it's not worth it to them.

Arbitration may be cheaper and more informal than the courts, but that doesn't mean that defending against this type of claim economical. On the whole, courts aren't that expensive, it's the cost of lawyers and their time where the costs pile up. Small-claims courts also often have simpler and more streamlined procedures just like arbitration does. And the Judge's salary is footed by the taxpayer.

The author's conclusion is that arbitration isn't all that bad because it worked out OK for him this time. But this ignores how arbitration puts the thumb on the scale in favor of the company when real money is on the table. Just to name a few: * Arbitration usually requires secrecy regardless of the outcome. This guarantees that the company will not face a repetitional hit even if they lose, and it also means that your case has no precedental value for others who were similarly wronged. * The process often places strict limitations on discovery, which can make it impossible for a prove your case. * The agreements usually prohibit class-actions, which prevents redress for widespread but low value abuses.

Sometimes, the less-formal nature of arbitration can be a good thing. But if it's truly balanced and better for both parties, it should be something that can be opted into after the dispute arises. The fact that there have been so many high-profile disputes about arbitration that have been taken to the Supreme Court is pretty solid evidence that companies see the ability to compel their customers into arbitration as exceptionally important to their bottom line.

Reply


@b3morales 1 month

Replying to @snapetom 🎙

> I also pointed out there was no out-clause in the contract for computer system failures

A good catch. I expect this oversight from the company's point of view has been remedied in the contract for new customers, going forward.

Reply


@CPLX 1 month

Replying to @snapetom 🎙

By the way it’s basically never true that you have to start with arbitration. You can pretty much always just sue them in a regular local court. As a general rule courts are general jurisdiction venues that can hear all controversies.

Then they would have to affirmatively file a “motion to compel arbitration” in which they appear in court and argue that the contract mandates it.

Typically they’d win that motion but then you’d just start arbitration. Since that requires them to show up with a lawyer by that point you’d probably be able to just negotiate then. And if they fail to ask for arbitration in a timely way the case may proceed.

Reply


@bmurray7jhu 1 month

Replying to @snapetom 🎙

For consumer arbitration, always try to choose JAMS instead of AAA. JAMS arbitrators tend to charge much more than AAA arbitrators. Many JAMS arbitrators have judicial experience, some even on the federal bench.

In my case, all of the arbitrators proposed by JAMS would have charged over $1000 per hour to resolve my case. Per the contract, all arbitration costs would have been borne by the defendant, so the company was eager to settle and avoid a huge arbitration bill.

Reply


@neycoda 1 month

Replying to @snapetom 🎙

A computer system being down is no excuse to refuse a pre-auth. They can write the details down on paper for later computer entry. They 100% broke the contract by refusing to process pre-auth details with or without a computer. How did we get along without computers? Paper and phones. If this company can't operate without computers, they shouldn't exist.

Reply


@sylware 1 month

Replying to @snapetom 🎙

I am not in the same country, but indeed, I have to go legal to enforce noscript/basic (x)html for the online services of my administration.

In my case, asking nicely, like in this case, was a huge fail.

Reply


@ncmncm 1 month

Replying to @snapetom 🎙

Their gross negligence and subsequent stonewalling should have earned them a penalty, not a 20% bonus.

Reply


@tiahura 1 month

Replying to @snapetom 🎙

As an attorney, I hope everyone reads this. Contrary to prevailing sentiment, arbitration is not de facto justice denied. In my experience, if you have a weak case, arbitration often results in a better outcome than a jury trial. Juries can be quite skeptical and judgmental. Arbitrators tend to be split-the-baby oriented.

Reply


@jccalhoun 1 month

Replying to @snapetom 🎙

>hot water heater

Why is the author heating hot water? (sorry. That's a pet peeve my dad drove into my head)

Reply


@thathndude 1 month

Replying to @snapetom 🎙

Arbitration consumer protection attorney here! Nice work, and nice write up.

If nothing else, I hope folks will run with your first point. Far too many people are scared of arbitration, and it can be a really powerful tool for situations like this. It’s fairly accessible and straightforward, especially for folks in the HN crowd.

One pointer for other folks in the future is to make sure you look into your state’s specific consumer protection law. (Sometimes called UDAP law or deceptive practices act.) Often times, these laws will allow you to recover more than just your out of pocket damages to punish companies that are deceptive.

One other way to “enlarge the pie” in situations like this is to hire an attorney. I know, it sounds like I’m shilling for my peers, but hear me out. This same UDAP consumer protection laws let you recover attorneys’ fees as part of a judgment/win. If you’re not an attorney, you simply can’t seek those.

So let’s say your claim is $2,000. Under those laws, maybe you can “treble” (triple) your damages if you win. So now your best day is $6,000. And the company knows it.

But if that same law says you can get attorneys’ fees too, the company knows that they could be facing a 50k+ judgment at the end (almost entirely comprising attorneys’ fees), and then that often incentivizes earlier, higher settlements. My involvement in cases, and the threat of attorneys’ fees often results in higher settlements than my client would get on their “best day,” and even after paying out my portion. (I typically do these on contingency — I don’t get paid unless you get paid).

Lastly, let’s just say I’ve done an arbitration or two with a home warranty company. They don’t make money by paying out claims!

Reply


@myskier 1 month

Replying to @snapetom 🎙

fairshake is an easy to use service that I have used that makes arbitration super simple.

Reply


About Us

site design / logo © 2022 Box Piper