Arbitration clauses: A rights giveaway
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Bland agrees, saying, "Arbitration companies have a strong incentive to tilt the results in favor of the companies who write the clauses and structure the system. We've seen certain companies that advertise their arbitration services to corporations and are currying favor with corporate defendants."

Naimark says that under protocols established by the American Arbitration Association, any arbitrators with overt bias toward either party can't act as an arbitrator in a particular case. The arbitrator is expected to reveal this bias on his or her own.

Proceedings and outcomes both secret
Because arbitration proceedings and the outcome of any cases are secret, there is no way for consumers and consumer watchdog groups to detect a pattern. There could be many complaints against a particular company for a product or service, but there is no way to know.

Hammond says that she served as an arbitrator in a predatory lending case and just as she was about to hold the hearing, the lender went bankrupt. That was when she found out that this lender had a history of many similar complaints.

"With arbitration, the public doesn't get a picture of what a corporation is like," she says. "Arbitration is private and confidential. We don't know what happens. You can't go to a courthouse and find out the results like you can when there is litigation. There is generally a lack of transparency."

Many consumer issues become public when regulators notice a pattern of problems, such as with tire blow-ups or defective toys, and force recalls. But if consumers, consumer groups and regulators are not aware of a pattern of problems with a particular product or service, it won't be resolved.

No right of appeal
Unlike the courts, an arbitrator's decision -- known as an award -- supposedly is final. In some cases, however, companies will state in such a clause that they have the right to appeal a verdict to a court of law -- not another arbitrator -- but you as a consumer don't.

"If they [consumers] lose, there's no appeal -- that means even legal errors in an arbitrator's decision are frequently beyond remedy," writes the National Consumer Law Center in a consumer and media briefing published in 2003. "And if they refuse to participate in this rigged game these clauses often dictate, they'll automatically lose the dispute with no further recourse."

Naimark sees the lack of an appeal as an advantage of arbitration over court trials, which can drag on for years. "As far as our process goes, the average time between when a complaint is filed and when it is resolved is 4.5 months," he says. "It is final, there are clear results and it doesn't drag on."

Businesses, but not consumers, exempt from arbitration
But many businesses exempt themselves from the mandatory nature of these clauses. If they have a problem with you, they can sue in court, but you can't sue them. Some companies also stipulate in their clauses that if a court sets aside the arbitration clause, you waive your right to a jury trial. That means you can go to court, but the dispute will have to be heard by a judge rather than a jury.