When the right to sue goes away Federal regulators are taking a closer look at those restrictive contract provisions that force consumers to arbitrate disputes - barring them from suing a company individually or joining a class-action lawsuit. And it doesn't look as if officials are buying into the business world's claim that such provisions are in consumers' best interest. "If you were to look in your wallet right now, the chances are high that one or more of your credit cards, debit cards or prepaid cards would be subject to a pre-dispute arbitration clause," Richard Cordray, director of the Consumer Financial Protection Bureau, said during a recent appearance in Dallas. "The terms are not subject to negotiation," he pointed out. Like the other terms of most consumer financial products, they are essentially 'take it or leave it' propositions. Many businesses prefer arbitration because settlements are limited and because professional arbitrators, whose fees are typically paid by the company in a dispute, tend not to bite the hand that feeds. A 2007 report by Public Citizen found that over a four-year period, arbitrators sided with credit card companies 94% of the time in disputes with California consumers. Consumer advocates have long argued that it's unfair to deny people the right to sue or to band together in class actions, which are often the only effective way of addressing relatively small claims. The U.S. Supreme Court ruled in a 5-4 decision in 2011 that businesses - phone companies, credit card issuers, cable operators - can include arbitration clauses in their service contracts. The ruling specifically involved AT&T but applied to all companies in all industries. That would seem to be the end of the story. But the same financial reform law that created the bureau in 2010 gave it the authority to "prohibit or impose conditions or limitations on the use" of arbitration clauses for credit cards, checking accounts and other financial contracts. That's what regulators are finally getting around to considering. Cordray said a preliminary investigation revealed that "few consumers use arbitration at all, at least when compared to the number of consumers involved in lawsuits and class actions." One reason for this, he suggested, is that many consumers might not find it worth their time to arbitrate relatively small sums of money. He said that "there are almost no disputes over amounts less than $1,000." Out of tens of millions of people subject to arbitration clauses in contracts for financial services, only 900 used arbitration from 2010 to 2012, investigators found. The U.S. Chamber of Commerce said in a 58-page letter to the bureau this month that officials seem to have already made up their minds that arbitration is bad for consumers. It said that "prohibiting or regulating arbitration will harm consumers more than it would benefit them." "Arbitration is at least as likely, and often more likely, than litigation in court to result in positive outcomes for consumers," the chamber said. If that were true, though, this wouldn't be an issue. The stats reported by the bureau indicate otherwise. I certainly haven't met many people who have reported satisfaction with the arbitration process. "Very few consumers go to arbitration," said Christine Hines, consumer and civil justice counsel for the advocacy group Public Citizen. Consumers prefer to have their day in court. I wouldn't be surprised if regulators reached the same conclusion. Workplace arbitration Even though consumers may soon get a break on unfair arbitration clauses, many company workers won't. This month a federal appeals court overturned a National Labor Relations Board decision that had barred employers from requiring arbitration agreements that prohibit class-action suits or collective claims over pay and hours. The case centered on a Texas home builder, D.R. Horton Inc., that made employees sign such contracts. More than 40 business groups submitted legal briefs supporting Horton's position. The 5th U.S. Circuit Court of Appeals decided that the National Labor Relations Board went too far when it ruled last year that Horton's workers had the right to sue if they wanted. "The use of class-action procedures is not a substantive right," Judge Leslie Southwick wrote this month for the three-judge panel. "This is an enormous victory for employers as they attempt to prevent the ongoing onslaught of class-action lawsuits," said Ron Chapman, the lead attorney for Horton. And never mind why those lawsuits were filed by employees in the first place.