Arbitration Statistics: About One Consumer in a Thousand Opts Out

by Jeff Sovern

Some arbitration clauses provide that consumers can opt out of arbitration if the consumer writes to the company within a certain period of time of entering into the agreement, typically 30-60 days after opening the account. In our arbitration study, we observed that we didn't know how many consumers had taken advantage of such opt-outs. Gregory J. Gauthier has emailed me to point out, among other things, that some information about opt-out rates is available. In Ross v. American Express, the Discover defendants submitted proposed findings of fact which stated (at ¶ 78) that "Since Discover added its opt-out clause, at least 6,500 cardholders have successfully opted out of the arbitration provision." Plaintiffs also submitted proposed findings of fact, and at ¶659, they acknowledged that, as they put it, " 6,500 [or] some 0.1% of Discover Cardholders" had opted out. If those figures are accurate and continue to reflect opt-out rates today, they indicate that about one consumer in a thousand opts out of arbitration clauses.