Resolve Consumer Disputes
FEDERAL TRADE COMMISSION
How to Resolve Consumer Disputes
|Bureau of Consumer Protection
Office of Consumer & Business Education
Produced in cooperation with the National Institute for Dispute Resolution
You've just bought
a product that breaks. You try to return the product or have the company
fix it, and that doesn't work. You talk to the salesperson; you ask
to speak to the manager; you write letters to the company's complaint
department and still you're not satisfied with the company's response.
Maybe it's time to try a dispute resolution program. Dispute resolution programs are an increasingly popular way to settle disagreements. They also can be quicker, less expensive, and less stressful than going to court.
Many businesses and private organizations, as well as public agencies, offer dispute resolution programs. State and federal courts may encourage you to try to resolve your problem through dispute resolution before you file suit.
Mediation and Arbitration
Two popular types of dispute resolution techniques
are mediation and arbitration. Through mediation, you and the other
party try to resolve the dispute with the help of a neutral third party
(sometimes called a mediator). In the course of informal meetings, the
mediator tries to help resolve your differences. The mediator does not
make a decision; it is up to you and the other party to reach an agreement.
The mediator is there to help you find a solution to your problem.
In arbitration, you present your case before an arbitrator, who makes a decision about the case. Sometimes an arbitration panel rather than one arbitrator decides the case. You and the other party may be able to select the arbitrator beforehand. Arbitration is less formal than court, though you and the other party may appear at hearings, present evidence, or call and question each other's witnesses. The decision may be binding and legally enforceable in court.
Where to Find Dispute Resolution Programs
The following kinds of organizations will help you find out what dispute resolution options are available in your area: government entities, such as local or state consumer protection agencies, state attorneys general, small claims courts, and some local court systems; local nonprofit dispute resolution organizations; local Better Business Bureaus; local bar associations; and local law school clinics.
Choosing a Dispute Resolution Program
You may want to contact several different dispute
resolution programs to find the best one for your needs. The following
questions may help you compare programs.
* Is the dispute resolution program voluntary or mandatory? Many dispute resolution programs are completely voluntary; the decision to use them is yours. Courts in more than 20 states, however, may order both sides in consumer cases to try arbitration or, in some cases, mediation.
* What procedures does the program use? If you choose mediation, you probably will have to attend meetings. If you use arbitration, you probably will have to appear for hearings. Some programs begin with mediation and, if no decision can be reached, progress to arbitration. Other programs resolve disputes on the basis of written submissions, without your needing to appear at meetings or hearings.
* Does the program allow you to help select the mediator or arbitrator? Many programs provide you with lists of eligible third parties (often called "neutrals"). You then can choose who will help you settle the dispute. Some states have specific requirements for neutrals. Ask the program administrators for the ethics rules. Most programs make sure that neutrals are not personally involved in the dispute and will not benefit from the resolution.
If you use a dispute resolution program that begins with mediation and, if needed, proceeds to arbitration, try to avoid using the same person to act as mediator and arbitrator. (For example, you might decide to omit or change some information in arbitration that was previously presented during mediation.)
* Is confidentiality important to you? Find out if the program guarantees confidentiality. Mediation is normally confidential; arbitration sometimes is.
* How neutral is the program? To get a sense of the program's neutrality, ask who pays for it.
* What are the costs? Some programs are free. Others charge a flat rate or by how much a consumer can afford.
* Is the decision binding, meaning that both parties must accept it? Mediation is nonbinding. Arbitration may be binding on the company, both parties, or neither. If the arbitrator's decision is nonbinding, you can reject it and try other avenues, including, in some areas, small claims court.
* Be sure you are willing to accept the possible outcomes from the dispute resolution program you choose.
Preparing for a Dispute Resolution Forum
Once you enter a dispute resolution program, the
process will progress more easily and effectively if you are well-prepared.
Here are some ways to better prepare your case.
* Know and follow the program's rules. Make sure you meet all the preliminary requirements. (For example, it's usually a good idea to try first to resolve the problem with the company involved.)
* File your claim promptly. The earlier you submit your claim or written statement and have the meeting or hearing, the less likely you are to forget important details.
* Outline the important facts of the case. You'll need to be able to tell when and where you bought the product, what the specific problem is, and what you've done already to try to resolve the problem.
* Document your claim. Collect receipts, repair orders, warranties, cancelled checks, contracts, or any other papers that document your case.
* Find out if witnesses are allowed. If the program allows witnesses to appear or submit statements on your behalf, make sure you know what the witnesses will say. If they are to appear in person, make sure they know where and when the hearing is. If they are to submit statements, make sure they know the appropriate deadlines and addresses.
* Get information from the other party. If the program allows, ask for documented information from the other party before the meeting or hearing.
* Know what you want the company to do. Go into the dispute resolution process with a preferred solution in mind. Decide, for example, if you would prefer the company to allow you to return the product for a refund, exchange it for a new product, fix the product at the company's expense, or refund your expenses (including any repair costs). At the same time, allow room for flexibility. You may have to compromise.
Preserving the Opportunity to Go to Court
A dispute resolution program may fail to settle a problem, and you may want to take your complaint to court. Make sure you preserve your opportunity to litigate. Some jurisdictions limit the time period in which you may sue. If you use a dispute resolution program to settle your complaint, know well in advance when your right to litigate your dispute expires. You also may be precluded from going to court if you enter into an arbitration program that is binding on both parties.
For More Information
For an expanded discussion of the dispute resolution
process and a list of mediation and arbitration programs, send for a
free copy of Road to Resolution: Settling Consumer Disputes.
Write: Public Reference, Federal Trade Commission, Washington, DC 20580,
or call (202) 326-2222.
In addition, for a free copy of the Consumer's Resource Handbook, which lists many names and addresses of resources to help resolve complaints, write: Consumer Information Center, Pueblo, CO 81009.
If you have complaints or comments about nationally government-run programs, write: Correspondence Branch, Federal Trade Commission, Washington, DC 20580. For concerns about privately-run programs, write: National Institute for Dispute Resolution, 1901 L Street, NW, Suite 600, Washington, DC 20036, or call (202) 466-4764.
Click here for a related FTC document.
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