“These terms include an Arbitration provision that governs any disputes between you and us. Unless you opt out, as described below, this provision will:
– “Eliminate your right to a trial by jury; and
– “Substantially affect your rights, including preventing you from bringing, joining or participating in class or consolidated proceedings.”
For many, it won’t be. A US enterprise, Starbucks has over 25,000 store locations around the world, with each location serving well over 500 customers every day on average. Half of their stores are situated within the United States. In 2013, Starbucks claimed that 7.5 million purchases were made every week via the Starbucks App, accounting for 90 percent of all mobile transactions in the US. At the time, Starbucks’ mobile wallet accounted for nearly 16 percent of all the company’s business, and it’s inevitable that in four years that number has gone way up.
The only way you may ever pursue a claim in court against the company in the future is if you send the company a written notice.
“… you may choose to pursue your claim in court and not by arbitration if you opt out of this arbitration provision within 30 days from the earliest of the date you downloaded, installed, accessed or used the Sites (the “Opt Out Deadline”) after these Terms have gone into effect.”
According to Starbucks, “[a]ny opt-out received after the Opt Out Deadline will not be valid and you must pursue your claim in arbitration or small claims court.”
This means, for the millions of consumers that use Starbucks Mobile Wallet for example, if the company gets breached and exposes your information to hackers who then steal your phone number, credit card information, name, address, or anything else, you will never be able to join a class-action lawsuit or consolidated proceeding against the company for reparations.
Instead, you will have to do it individually, through forced arbitration instead of in court, and you will have little power against the massive corporation.
Class-action lawsuits are often the only way for individuals with little legal recourse to fight back against large corporations that they have a legal dispute with. Without the ability to consolidate their legal power against massive corporations, individuals very quickly find themselves alone, up against companies that hold extreme jurisdiction and access to resources.
So why is this happening?
Equifax, one of the United States’ three major credit reporting firms, experienced a massive data breach that left 143 million Americans with their sensitive information exposed, including names, social security numbers, birth dates, addresses, and other identifying data.
After waiting months to disclose the breach, the company set up a new website for consumers to check if their information was exposed, offering new credit protection and monitoring on the site. After looking into it, journalists discovered that by signing up for the service, consumers automatically waived their right to litigation, instead submitting to forced arbitration. Like the financial institutions before them, Equifax cleverly protected themselves from effective lawsuits by crippling the consumer’s ability to band together with one another, forcing them to each make their claim with the company — in private, one on one — with little-to-no power.
The Vice-President had to break the tie in the Senate, making the vote a stunning 51-to-50, despite the fact that a poll in July indicated two-thirds of the American public supported the rule.
“Tonight’s vote is a giant setback for every consumer in this country. As a result, companies like Wells Fargo and Equifax remain free to break the law without fear of legal blowback from their customers.”
— Richard Cordray, CFPB Director
The new rule has been in the making for the past five years by the Consumer Financial Protection Bureau — the watchdog agency created as part of Dodd-Frank — implemented to prevent a repeat of the 2008 financial crisis.
Starbucks seemingly realised that a very similar policy to could significantly bolster their ability to fight off angry consumers in the event of a mistake, like for example, a breach in financial information. Now, the millions of American customers of the Starbucks corporation who use the company’s Mobile Wallet and Starbucks Card are without rights to class and consolidated proceedings.
There is mounting evidence that Congress has not been voting with their constituents in mind. In April Congress killed American internet privacy protections, a motion that a vast majority of Americans were not in favour of.
All this deregulation leaves consumers in the United States more vulnerable and without legal recourse when something goes wrong.
The last time a Republican government deregulated throughout its time in power, it ended in a financial crisis. Somewhere, Nero is playing his fiddle.
UPDATE: Upon further research, the terms of service for all internet properties owned by the Cable News Network, Inc. are now updated to include a clause extremely similar to that of Starbucks. CNN, the ‘most trusted name in news,’ has joined the list of corporations using legal loopholes to prevent class litigation in the event Americans take issue with their practices.
“[The terms of service apply to] current and future online and mobile websites, platforms, services, applications, and networks owned or operated by CNN, including without limitation, CNN.com, CNNMoney.com, HLNtv.com, CNNI.com (edition.cnn.com) and cnnespanol.com, and/or for which CNN currently or in the future provides services and/or technology (the “Site” or “Sites”).”
For any American readers, the only way to protect your information is by always reading the Terms of Service for every large entity you interact with, and if you’ve been hit by the Equifax data breach, freezing your credit.
Originally written on Medium.