An OCP investigation prompted by consumer complaints has shown that at least two Jiffy Lube® locations in Montgomery County provide a sales receipt and written satisfaction guaranty that includes a clause requiring consumers to submit any controversy or claim to mediation and arbitration conducted by a specific mediation and arbitration service. However, this “forced arbitration” clause fails to disclose that the mediation and arbitration service is actually owned and operated by the merchant’s attorney.
The failure to fully disclose that a customer must pay the merchant’s attorney to resolve any disputes is misleading and deceptive,” said OCP Director Eric Friedman. “Impartial mediation and arbitration services may sometimes be an equitable way to resolve disputes. However, requiring a consumer to unknowingly pay for mediation and arbitration that is one-sided and biased is clearly unconscionable. Such clauses may seek to take away a consumer’s right to file a lawsuit in Small Claims Court or to participate in a class action lawsuit.
OCP became aware of Jiffy Lube’s forced arbitration clause during the course of investigating complaints from two consumers alleging that their vehicles were damaged as a result of improper oil changes. Efforts were made to conciliate the matter with the merchant and his attorney.
OCP has grown concerned about the increasing practice of merchants in many different industries using mandatory mediation or arbitration clauses in an effort to prevent consumers from exercising the right to file claims against merchants in any court. Clauses also seem to deny consumers the right to participate in any class action lawsuits.
OCP licenses all auto repair facilities, towing firms and new home building operators in Montgomery County. The Jiffy Lube® locations in the County are individually owned franchisees. Jiffy Lube® International, Inc. is a franchisor that oversees more than 2,000 independently owned service stations in the U.S. and Canada.
When making any type of purchase, OCP warns consumers to be careful not to accept mediation or arbitration services that are unfair and detrimental to their interests.
OCP offers free, neutral mediation services for consumers and merchants. The mediation services are conducted by expertly trained mediators who volunteer their services. For more information about this or other consumer questions, contact the County Office of Consumer Protection at consumer@montgomerycountymd.gov or visit www.montgomerycountymd.gov/OCP.