Consumer Fraud

Arbitration clause found in Chrysler “Friends Program Pricing” form

Gavel Scales of Justice American flag square Arbitration clause found in Chrysler Friends Program Pricing formChrysler appears to have pulled a fast one on a number of unsuspecting car buyers signing mountains of paperwork by slipping in an arbitration clause on the “Chrysler Group LLC – Employee Advantage – Friends Program Pricing & Acknowledgment Form.”

According to Jalopnik, the Chrysler dealer offers the contract as part of a one percent discount to the buyer. At first glance, the form appears non-threatening, aptly named the “friends program,” to encourage potential buyers of simply signing it and moving forward. However, in all caps, but smaller font, reads the following sentence:  “THIS CONTRACT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE ENFORCED BY THE PARTIES.”

Upon signing the agreement, the buyer saves close to $200 on the vehicle, but also signs away his right to sue under the Lemon Law. While the buyer is able to arbitrate his complaint with the automaker, Chrysler will be able to set the forum and the rules. Basically, the customer becomes entirely withholding to Chrysler, giving away his right to his day in court.

Tom McParland, Jalopnik’s car-buying guru, released this statement in regard to Chrysler’s hidden arbitration clause:

“One percent under invoice is a joke. Even if you forget about the crappy cars that Dodge has to give away like the Dart and the Journey and just focus on something that is actually popular like a Charger the average sale price according to TrueCar is about $3500 under invoice or about 10%. Of course TrueCar’s ‘estimated savings’ isn’t always super accurate, but their ‘average paid’ price relative to invoice for a specific vehicle in the national market is a good data point for comparison.”

The intended purpose of any arbitration clause is to undermine consumer protection, civil rights and other laws that level the playing field between big business and individuals. To make matters even worse, the individual is often left with no choice but to waive these rights, because arbitration clauses are presented on a take-it-or-leave-it basis.

Jalopnik says that the minute you see an arbitration clause in your future vehicle’s paperwork, “run away,” because it’s never worth it.

Beasley Allen