On Wednesday, I blogged about Roseanna Sommers’ important new arbitration study. One point I want to highlight about the study is that it makes clear that consumers don’t understand arbitration opt-outs at all. First, some background: some companies insert in their arbitration clauses a provision that allows consumers to opt out of arbitration if they notify the company in writing shortly after agreeing to the contact. Companies then use the opt-out provisions to claim that arbitration clauses are not unconscionable. I have previously argued that the opt-outs are a type of opaque (dark) pattern. The Sommers study offers much to confirm this view.
Thus, Professor Sommers showed consumers a contract including an arbitration clause and opt-out provision, and asked them if it included an opt-out. More than twice as many respondents incorrectly said it didn’t include such a provision as correctly said it did. Add in those who said they didn’t know, and you have 4.5 times as many respondents saying either the contract didn’t give them a right to opt-out, or that they didn’t know if it did, as said that it did give them a right to opt-out. When asked how they could opt out, not even a third of one percent mentioned that they had a 60-day deadline for opting out.
The study also asked respondents whether they had agreed to contracts with companies, like Netflix, that provided for opt-outs and asked about opt-outs in connection with those companies. Only two respondents–about a fifth of one percent–were able to identify a company that permitted opt-outs and describe correctly a step needed to opt-out.
In short, the Sommers study makes a devastating case that consumers are not aware of arbitration opt-outs and that the opt-outs are no more than a fig leaf to protect companies, not consumers.
