Consumers face an unfair disadvantage at the pharmacy counter

By Sally Greenberg, NCL Executive Director

Everywhere we turn these days, we find ourselves wondering if we are getting a fair deal. Americans continue to suffer the economic consequences of a year-long global health pandemic, and many of us are trying to stick to the essentials and stretch our dollars where we can. As COVID-19 has reminded us, there aren’t many issues families face that are more significant than access to health care.

Families can’t go without essential prescriptions and often wonder why the price seems to go up each time they go for a refill. In fact, we are likely paying more than necessary at the pharmacy counter, but we don’t often know — or even think to ask — why.

A variety of factors drive drug costs, some of which are obvious: the cost of research and development, distributing the product, the pharmacies’ profits – but there is one far less known cause of price increases: PBMs, short for pharmacy benefit managers.

Most people have never heard of PBMs, and PBMs like it that way. They are billion-dollar companies that control more than 80 percent of the prescription drug formularies, (formularies are the lists of drugs that a health plan allows its members to access) — in the United States.

Because of their outsized role, too often PBMs determine how much consumers, businesses, government agencies, and others pay for medicines. As originally conceived, PBMs were meant to help ensure that patients get a fair deal by:

  • working with manufacturers to ensure rebates (or savings) for medications
  • working with insurance companies to determine which medications are covered
  • working with pharmacies to set the price points and help reimburse pharmacies for dispensing prescriptions.

In theory, PBMs should be lowering costs for everyone. However, as they have evolved and grown, they’ve become greedy and self-serving entities, scooping up discounts for themselves and throwing consumers under the bus. All the while, their profits continue to soar as they are all among the top Fortune 500 companies.

Sadly, PBMs have also found ways to manipulate the system and put their own profits first.

Insulin is a prime example. Diabetes patients who need their medication to survive are increasingly left with fewer options for treatment. When PBMs get involved, consumer costs increase.

One recent analysis found that the total value of rebates and discounts for insulin on an annual basis amounts to more than $5,000 per patient. Another report explained that the net price on one insulin product — what the company earns as revenue — declined by 53 percent since 2012, while the list price increased 141 percent. As the WSJ story explains, this is in part due to PBM middlemen meddling. In order to ensure formulary positions (which PBMs control), companies are paying more and more each year.

Consumers don’t know where high drug prices come from and they shouldn’t have to — the system needs to deliver affordable, accessible, safe and effective medications without any entities taking an unfair or hidden profit. The stakes are too high as we look ahead to the health challenges that millions face with the Covid pandemic.

NCL joins with many other groups, including America’s Agenda, United Food and Commercial Workers International Union, HMC Healthworks, Union of Bricklayers and Allied Craftworkers, National Community Pharmacists Association, National Alliance of State Pharmacy Associations, Diabetes Leadership Council, and Diabetes Patient Advocacy Coalition in helping to expose hidden, and frankly, indefensible profits being directed to the coffers of PBMs — money that should be redirected to bring drug prices down for patients and consumers.

Let’s all ask hard questions about PBMs’ role in our healthcare system and whether we can’t be using the profits they are taking to lower drug costs. Share this story with others. Talk with your friends and family. Ask your local pharmacist questions.

Consumers – not PBMs — should come first at the pharmacy counter. Stay tuned for more from us on this, and let’s continue the conversation.

Days before crucial deadline, NCL joins 300+ groups call for Congress to rescind ‘Fake Lender’ rule that facilitates predatory loan schemes

Only a majority vote in Congress would be needed to overturn rule that helps triple-digit interest rate loans evade state and voter-approved interest rate caps and spread across the country

March 23, 2021

Media contact: National Consumers League – Carol McKay, carolm@nclnet.org(412) 945-3242 or Taun Sterling, tauns@nclnet.org(202) 207-2832

Washington, DC—With just a few days left before a crucial deadline, the National Consumers League (NCL) joined a broad coalition of 324 organizations from all 50 states and the District of Columbia calling for Congress to eliminate a Trump-era regulation that took effect in December and could “unleash predatory lending in all 50 states.” The rushed “fake lender” rule, which was issued by the Office of the Comptroller of the Currency (OCC), would facilitate “rent-a-bank” schemes whereby predatory lenders launder their loans through a few rogue banks, which are exempt from state interest rate caps, through a superficial partnership meant to evade critical predatory lending rules. Linked here and included at bottom is the coalition’s letter to Congress.

“States across the country have passed laws to protect their citizens from predatory lending. This harmful rule undoes that progress,” said Sarah Robinson, Public Policy Manager at the National Consumers League.  “We call on Congress to protect consumers from these types of predatory loans that target vulnerable communities and seek to trap borrowers in a cycle of debt.”

As was done more than a dozen times under President Trump, this Congress could use the Congressional Review Act (CRA) to rescind recently finalized regulations, including the OCC’s “fake lender” rule, with just a majority vote in both chambers, limited debate, no filibuster, and the president’s signature. However, to be considered, there is a strict deadline for CRA resolutions to be introduced, estimated to be April 4. With spring recess coming up, the practical deadline is likely the end of this week. A CRA of the OCC “fake lender” rule has not yet been introduced. These resolutions also must be voted upon by a certain date, currently estimated for sometime between May 10 and May 21.

The coalition of signatories to the letter consists of 325 groups, including civil rights, community, consumer, faith, housing, labor, legal services, senior rights, small business, student lending, and veterans organizations representing all 50 states and the District of Columbia. The letter states that “[t]he rule replaces the longstanding ‘true lender’ anti-evasion doctrine with a ‘fake lender’ rule that allows lenders charging rates of 179 percent or higher to evade state and voter-approved interest rate caps merely by putting a bank’s name on the paperwork – just as payday lenders were doing in the early 2000s.”

The groups warn, “These lenders charge triple-digit interest rates, target the financially vulnerable and communities of color, and trap consumers in devastating cycles of debt…. Currently, there are only a few of these rogue, predatory lenders, but they will spread to all 50 states if the OCC rule is not overturned.”

A 2-pager explanation of the “fake lender” rule is here.

###

About the National Consumers League (NCL)

The National Consumers League, founded in 1899, is America’s pioneer consumer organization. Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad. For more information, visit www.nclnet.org.
[/av_textblock]

Nancy Glick

2021 NCL Food Policy Priorities

Nancy GlickBy Nancy Glick, Director of Food and Nutrition Policy

With the enactment of the American Rescue Plan, the new Biden Administration will bring about important changes to overcome one of the most urgent problems caused by the COVID-19 pandemic: millions of Americans are facing hunger in the U.S. and many of them are children. According to the latest Household Pulse Survey from the Census Bureau, over 25 million people do not have enough food to eat some of the time or often.[1]

Yet, this is just one of the food-related challenges encountered during the pandemic. About 110,000 restaurants have closed permanently[2], retail food prices went up an average of 3.4 percent in 2020[3], and the amount of food waste, estimated at between 30-40 percent of the food supply before the pandemic[4], has grown exponentially. Additionally, and unrelated to the pandemic, the recently released 2020-2025 Dietary Guidelines for Americans underscores an explosion of obesity and diet-related diseases in America. Some disturbing findings are that 6 in 10 adults have one or more diet-related chronic diseases and seven percent of children and teens have been diagnosed with high blood cholesterol levels.

All these problems affect the lives of all Americans, which is why the National Consumers League (NCL) will intensify our education and advocacy in 2021 to advance healthier eating, improve food safety, reduce food insecurity, and address food waste.

We focus our efforts on where we can have the most impact, taking action to:

1. Elevate portion control and balance as a consumer issue

NCL will advance the Dietary Guidelines’ recommendation to achieve a healthy balance of food choices by emphasizing the importance of portion control and ensure consumers know the recommended daily intake of calories is 2,000 per day. We also want to encourage greater use of “My Plate,” a plan developed by the U.S. Department of Agriculture (USDA) to help consumers personalize their portions for various food groups—what and how much to eat, based on one’s age, sex, height, weight, and physical activity level.[5]

2. Reduce excess sodium in the diet

NCL is greatly concerned that Americans on average consume 50 percent more sodium per day than recommended by the Dietary Guidelines. Because this increases the risk for hypertension, heart disease and heart attacks, and stroke, we will advance the goal set by the Food and Drug Administration (FDA) to lower sodium intake to 2,300 milligrams (mg) per day and encourage consumers to flavor foods with herbs and spices instead of salt, and use the Nutrition Facts label to choose products with less sodium, reduced sodium or no salt (sodium) added.

3. Improve the labeling of alternative sweeteners

NCL applauds FDA’s decision to include “Added Sugars” on the recently updated Nutrition Facts label but we remain concerned about how novel sweeteners are labeled. Therefore, NCL is supporting a Citizen’s Petition to FDA to ensure transparent labeling of substitute sweeteners and has joined with other consumer groups in urging FDA to stop misleading claims, such as “No Added Sugars,” “Zero Sugar,” and “Reduced Sugars.” These claims imply the new product is healthier than the original, without disclosing that the sugar reduction resulted from reformulating with artificial substances and sugar alcohols.

4. Make alcohol facts labeling mandatory

Since 2003, NCL and 75 other consumer, public health, medical and nutrition organizations have pressed the federal agency that regulates alcoholic beverages—the Treasury Department’s Bureau of Alcohol and Tobacco Tax and Trade (TTB)—to issue rules requiring an easy-to-read, standardized “Alcohol Facts” label on all beer, wine, and distilled spirits products. Currently, TTB has opted for voluntary labeling and the result is that many products remain unlabeled or carry incomplete labeling information. We are not giving up! In 2021, NCL will step up the fight to ensure complete labeling information on alcoholic beverages.

5. Require labeling of caffeine content

FDA considers 400 mg of caffeine per day as the amount not generally associated with dangerous side effects. An 8-ounce cup of coffee has about 95 mg of caffeine, a 12 ounce can of Coca-Cola has 34 mg, high caffeine drinks may have 160 mg for 16-ounces. The FDA only requires food labels to disclose that there is added caffeine in the food or beverage. This makes it hard for consumers to stay within the recommended limit because they don’t know how much caffeine is in the foods and beverages they consume. For this reason, NCL strongly believes that all products containing caffeine should be required to list the amount of caffeine per serving and per container and we will push for that requirement.

  1. Modernize food standards of identity

“Standards of identity” establish recipes for what a food product must contain, how it must be proportioned, and sometimes how it must be manufactured. However, many food standards are now 75 and even 80 years old and out of date. This is why NCL supports FDA’s action plan to modernize food standards of identity, but we are also calling attention to several food products—such as olive oil, Greek yogurt, and canned tuna—where issuing new or updated standards of identity are needed now.

7. Revise the definition of the term “healthy” and front of pack food labeling symbols

Currently, a food can be labeled “healthy” if the amount customarily consumed is low in fat, low in saturated fat, contains less than 480 mg of sodium, has a limited cholesterol, a significant amount of fiber, and at least 2 additional beneficial nutrients such as vitamins A, C, D, calcium, iron, protein or potassium. This will change because FDA recently modified how low fat will be calculated. While NCL supports this step, we will press FDA to address if and how added sugar content is calculated and will encourage FDA to adopt a “Traffic Light” labeling system to depict “healthy” on the front of the package.

8. Strengthen the food safety system

NCL will work individually and as a member of the Safe Food Coalition to make improvements in the nation’s food safety system. Priorities include finalizing FDA’s Food Traceability Proposed Rule, which would establish a standardized approach to traceability recordkeeping; expanding pathogen testing in meat and poultry products; and updating safe handling instructions labels for these products.

9. Reduce the amount of food waste

Every year, about 90 billion pounds of food goes uneaten in the US, with huge environmental and food insecurity consequences. To change this food waste crisis, NCL will raise awareness of food loss and waste and inform consumers about how they can reduce food waste in their homes and when they go out to eat.

10. Increase funding and access to federal nutrition programs

NCL will work to make permanent the 15 percent Supplemental Nutrition Assistance Program (SNAP) benefits increase now included in the American Relief Plan, while also pressing for additional funding for the National School Lunch and Breakfast Program.

Conclusion: Advancing a policy agenda that ensures transparent food labeling, improves the safety and quality of the foods people eat, reduces food insecurity, and addresses food waste is essential to improving American’s lives. The stakes are high and NCL is committed to making a difference for consumers


[1] U.S. Census Bureau. Household Pulse Survey. May 20, 2020

[2] National Restaurant Association. COVID-19 Restaurant Impact Survey V. December 2, 2020

[3] U.S. Bureau of Labor Statistics. Consumer Price Index Summary. March 10, 2021

[4] Food and Drug Administration. Food Loss and Waste. February 23, 2021

[5] The National Confectioners Association “Always a Treat” consumer education campaign is one example of how portion control can be easily utilized to control calorie consumption and achieve the dietary patterns recommended in the Dietary Guidelines. As part of this campaign, leading chocolate and candy companies have pledged that half of their individually wrapped products will be available in sizes that contain 200 calories or less per pack.

Is it a meat product or not?

By Nailah John, Program Associate

My husband has a great desire for meatless products, so on my weekly grocery shopping visits, I find myself standing in the freezer aisle for minutes reading the confusing labels on these meatless products. Many of the labels illustrated on the front of the packages usually have an image of a burger or chicken nuggets and can be difficult to distinguish between actually meat products. The packaging displays verbiage like Chik, Steaklet, Well Carved, Chick N’Mix, and are placed in areas where grocery shoppers purchase regular meat products, which makes it all the easier for consumers to mistakenly purchase meatless products.

Plant-based burgers and faux-chicken nuggets are the new trend and many consumers either want to try it or have fallen in love with the product. According to a poll done by Gallup in 2020, 41 percent of adults in the U.S. have tried a plant-based meat product. The study illustrated that about half of Americans are familiar with a plant-based product. The overall takeaway? Plant-based products are in fact getting pretty big so their popularity is growing. Many consumers of plant-based products have expressed that they are cutting back on their meat consumption. Health, the environment, and animal welfare are all cited as major reasons why. With more and more Americans trying these plant-based products labeling should be precise, not misleading.

Many industry leaders continue to recommend that these products should not use wording like “vegan” or “vegetarian” because it may turn away potential customers. It is also suggested that putting meat-free options in a separate vegetarian section of the menu or in the vegetarian section of a grocery store could reduce sales. The term plant-based has been the alternative to the word vegan which is more appealing to the consumers.

However lucrative marketing buzz words may be, the wording and imaging for products should reflect what the consumer is purchasing. This wordplay and product placement tactics are being used to bamboozle consumers.

We all have a right to know what is in our food, how it is produced, and where it is from. We also have the right as consumers to demand clear labeling. It’s challenging to stand in a grocery store for 5 to 10 minutes just trying to be sure that the plant-based product we’re looking to buy is actually plant-based. The labels and imagery do not reflect this by showing chicken-like nuggets, burgers, meatballs, and other imagery that sends a false message to our minds. As a consumer, I no longer want to be confused. I want to be able to easily differentiate between real meat and plant-based meat products.

National Consumers League applauds House passage of American Rescue Plan

March 10, 2021
Media contact: National Consumers League – Carol McKay, carolm@nclnet.org, (412) 945-3242 or Taun Sterling, tauns@nclnet.org, (202) 207-2832

Washington, DC—The National Consumers League (NCL) applauds the House of Representatives’ action to approve President Joe Biden’s relief package, known as the American Rescue Plan.

“The American Rescue Plan is a monumental relief package and critical antipoverty measure that will give desperately needed support to average Americans who have been devastated by COVID-19, including sending out $1,400 checks and funding states’ efforts to streamline and speed up vaccine distribution. This is a much-needed measure, and we are grateful to the Administration and Congress for their round-the-clock work in getting this essential support into the pockets of hard working Americans,” said NCL Executive Director Sally Greenberg.

With the 220-211 House vote, the bill will go to the President’s desk for signature. NCL applauded specific measures included in the legislation:

  • $300 federal boost to weekly jobless payments and extension of two key pandemic unemployment benefits programs through September 6.
  • Expansion of the child tax credit to up to $3,600 per child and $3,000 for each child under age 18 . Currently, families can receive a credit of up to $2,000 per child under age 17.
  • The first $10,200 worth of benefits payments are tax-free for households with annual incomes less than $150,000.
  • The Pandemic Unemployment Assistance program, which provides benefits to freelancers, gig workers, and independent contractors.
  • The Pandemic Emergency Unemployment Compensation program, which increases the duration of payments for those in the traditional state unemployment system.
  • $350 billion in relief to states, local governments, territories. and tribes.
  • $10 billion Coronavirus Capital Projects Fund.
  • 15 percent increase in food stamp benefits through September (it was previously set to expire at the end of June).
  • $880 million for the Special Supplemental Nutrition Program for Women, Infants, and Children, known as WIC, to help increase participation and temporarily improve benefits, among other measures.
  • $30 billion to help renters and landlords weather economic losses.

“It’s a great relief that passage of the bill comes ahead of a Sunday deadline, when a federal boost to unemployment benefits was set to expire,” said Greenberg.

###

About the National Consumers League (NCL)

The National Consumers League, founded in 1899, is America’s pioneer consumer organization. Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad. For more information, visit www.nclnet.org.
[/av_textblock]

NCL encourages HHS nominee Becerra to continue efforts to help lower consumer out-of-pocket costs at the pharmacy counter

March 1, 2021
Media contact: National Consumers League – Carol McKay, carolm@nclnet.org, (412) 945-3242 or Taun Sterling, tauns@nclnet.org, (202) 207-2832

Washington, DC—The National Consumers League is encouraging the Department of Health and Human Services (HHS) nominee Xavier Becerra to continue critical efforts to help drive down consumer out-of-pocket costs of medicines at the pharmacy counter.

Last week, Becerra testified before the Senate HELP Committee as his confirmation hearings were underway. If confirmed, Becerra would play a critical role in helping consumers pay no more than necessary for the medications they need by addressing the role pharmacy benefit managers (PBMs) play in determining what consumers pay and why.

NCL Executive Director Sally Greenberg weighed in with the following statement:

“PBMs have repeatedly promised to lower costs for patients, but unfortunately we’ve not seen this in action. When it comes to prescription drug access and affordability, we should all be on the side of consumers, rather than middlemen corporations. The challenges posed by COVID-19 serve as a daily reminder of the importance of standing up for individuals and families that don’t have the knowledge or patience to understand why they’re subjected to PBM schemes. If confirmed, Attorney General Becerra will have the opportunity to continue working on this issue and helping to ensure PBMs uphold their promise to consumers. Everyone in the health care system needs to work to reduce costs for consumers, who are burdened by high costs across the board. We look forward to joining with him to get to the heart of why out-of-pocket costs are rising and, most importantly, what can be done about it.”

###

About the National Consumers League (NCL)

The National Consumers League, founded in 1899, is America’s pioneer consumer organization. Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad. For more information, visit www.nclnet.org.
[/av_textblock]

Jeanette Contreras portrait

Vaccine recommendations for those who recovered from COVID-19

By NCL Director of Health Policy Jeanette Contreras

As the United States prepares for the release of a third COVID-19 vaccine, the Centers for Disease Control and Prevention (CDC) Advisory Committee on Immunization Practices (ACIP) meets to discuss further implementation considerations that will inform guidance for the vaccine rollout. At its March 1 meeting, ACIP dedicated a portion of the discussion to whether those who’ve recovered from the virus should still be vaccinated.

To date, there are more than 28 million confirmed cases of COVID-19, and experts estimate that the true number of individuals infected, yet not clinically confirmed, to be triple that amount, pushing the total prevalence to approximately 100 million. A recent study by the National Institutes of Health (NIH) indicates that those who’ve recovered will have a certain amount of natural immunity to the virus for up to eight months after infection, which is in line with the findings of a major British study published in early February, in which 88 percent of participants who previously tested positive for COVID-19 still had antibodies after six months.

Considering that the demand is greater than the supply, it is a difficult task to make recommendations for the equitable distribution of vaccines. For example, Spain issued recommendations that patients wait six months after diagnosis to get vaccinated if an individual is under age 55 with no major health complications. People over 55, or those with health risks that make them vulnerable to reinfection, are exempt from this delay and encouraged to be vaccinated.

Additionally, early studies are showing that immunity in individuals who had recovered and received one shot may be equal to or even exceed those not infected who had received two doses. According to the University of Maryland School of Medicine, a single dose of the Moderna or Pfizer mRNA vaccines would elicit an immune system response sufficient to provide comparable immunity to two doses in a non-infected person. On February 12, France became the first country to issue guidance recommending that people who have already recovered from COVID-19 only need to receive one dose of a vaccine, between 3 and 6 months after their infection.

Early research like this is informing public health policies in other countries. But the United States is known all over the world for its scientific rigor and reliance on randomized clinical trial data as a gold standard. In a recent blog, NIH Director Dr. Francis Collins reassures us that, should other studies support these early results, the experts at the Food and Drug Administration (FDA) and CDC will certainly consider whether one dose is enough.

The implementation of a one-dose vaccine would help to increase supply, however, the emergence of COVID-19 variants presents new challenges for curbing this pandemic. Current CDC guidance states that even if you’ve recovered from COVID-19, you should get vaccinated. Arming yourself with a vaccine will keep you and your family safe, and ultimately help to stave off new COVID-19 variants.

National Consumers League statement in support of HR 40, the Commission to Study and Develop Reparation Proposals for African-Americans Act

For immediate release: February 18, 2021

Media contact: National Consumers League – Carol McKay, carolm@nclnet.org(412) 945-3242 or Taun Sterling, tauns@nclnet.org(202) 207-2832

Washington, DC—The National Consumers League (NCL) is proud to join hundreds of like-minded groups in supporting HR 40, which would create a commission to study and develop reparations proposals for African Americans. The House Judiciary Committee hearing on HR 40 on February 17, 2021 gave witnesses the opportunity to talk about the reason for and impact of reparations. The hearing also included several witnesses who oppose the concept of reparations.

Introduced by Rep. Sheila Jackson Lee (D-TX), HR 40 would create a commission to identify: (1) the role of the federal and state governments in supporting the institution of slavery, (2) forms of discrimination in the public and private sectors against freed slaves and their descendants, and (3) lingering negative effects of slavery on living African-Americans and society.

This statement is attributable to NCL Board Chair Dominique Warren:

America has never reckoned with its 400 years of enslavement of 12 million Africans, brought to our shores shackled in fetid ships where huge numbers died of disease. As Michelle Singletary, Washington Post columnist has observed, reparations are not handouts, they are redress.

Beginning in 1619, enslaved people were brought to America and sold by those who profited from the slave trade, bought by plantation owners, farmers, businesses, and households, separated from siblings, parents, spouses and children and forced to work for free. After the Civil War, many freed slaves purchased land, only to see it stolen. Prosperous Black towns were looted and burned. Blacks have been beaten and murdered, many lynched on false allegations of criminal conduct  because of their race. Throughout America’s history, Blacks have been denied the right to vote and redlined from living in certain neighborhoods. Black Americans were and still are discriminated against in the workplace and prevented from earning fair and equal pay.

A new book on reparations, “From Here to Equality: Reparations for Black Americans in the Twenty-First Century,” recommends a number of possible compensation programs, including the establishment of a trust that could make grants to eligible Blacks to help start a business or buy a home.

NCL agrees with these recommendations, made by authors William A. Darity Jr. and A. Kirsten Mullen, that “the U.S. government, as the federal authority, bears responsibility for sanctioning, maintaining, and enabling slavery, legal segregation, and continued racial inequality.”

America has benefited from the institution of slavery. Segregation and voter suppression has given advantages to White Americans in the form of cheap Black labor, reduced employment competition, and the power to elect politicians who enacted laws that worked in the best interest of Whites and against equal opportunities for Black people.

Redress is part of the American justice system, indeed part of the international justice system. The federal government issued an apology and cash reparations to Japanese Americans who were interned in camps during World War II.  Germany paid reparations to Jewish survivors of the Holocaust.

Studying reparations for African Americans as one approach to redress by setting up a Commission to thoroughly study the cost of slavery, Jim Crow policies that followed it, and the ongoing discrimination against black Americans would truly begin the national discussion and the reconciliation and healing that needs to take place. The National Consumers League strongly supports HR 40 and urges its swift passage by members of Congress.

###
About the National Consumers League (NCL)
The National Consumers League, founded in 1899, is America’s pioneer consumer organization. Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad. For more information, visit www.nclnet.org.

National Consumers League supports the FAIR Act to end forced arbitration

For immediate release: February 17, 2021

Media contact: National Consumers League – Carol McKay, carolm@nclnet.org(412) 945-3242 or Taun Sterling, tauns@nclnet.org(202) 207-2832

Washington, DC—NCL is pleased to support the Forced Arbitration Injustice Repeal Act (FAIR Act), a bill to re-establish Americans’ 7th Amendment right to seek justice and accountability through the court system. NCL applauds Representative Hank Johnson (D-GA) for introducing this critically important consumer and worker protection legislation as well as the Subcommittee on Antitrust, Commercial, and Administrative Law of the House Judiciary Committee for holding its February 11 hearing on the bill.

The bill previously passed the House of Representatives during the 116th Congress on Sept. 20, 2019 by a strong bipartisan vote of 225 to 186. The FAIR Act (H.R. 963) would eliminate forced arbitration clauses in employment, consumer, and civil rights cases and would allow consumers and workers to agree to arbitration after a dispute occurs. The House bill has 155 cosponsors.

This statement is attributable to NCL Executive Director Sally Greenberg:

Forced arbitration is a glaring marketplace injustice that undermines key worker and consumer protections. Thanks to a series of unfortunate Supreme Court decisions, forced arbitration clauses are ubiquitous throughout the marketplace. Thus, it falls to Congress to correct this injustice. Arbitration clauses are buried in the fine print of consumer and employment contracts for everything from cell phones, credit cards, cable service, nursing homes, employment, bank loans, student loans, apartment leases, and video subscriptions. Their practical effect is to block consumers’ and workers’ right to go to court. The actual arbitration process is fraught with problems; everything can be done in secret and without public rulings. Discovery is limited, and there is no meaningful judicial review, so consumers and employees are often unable to appeal a decision even if the arbitrator gets it wrong. Corporations can also choose where the arbitration will take place, what the rules will be, and how the costs will be borne.

Simply put, arbitration lacks the safeguards of a fair, impartial, and accessible court proceeding to protect people and hold accountable corporations that have committed widespread abuses, or marketed unsafe products or services.

As the late Justice Ruth Bader Ginsburg said about the Supreme Court’s rulings on forced arbitration, they ‘have predictably resulted in the deprivation of consumers’ rights to seek redress for losses, and turning the coin, they have insulated powerful economic interests from liability for violations of consumer protection laws.’

Congress never intended this. The Federal Arbitration Act was enacted in 1925 to give businesses — with relatively equal bargaining power — options for resolving their business disputes.

The FAIR Act would even the playing field. Contrary to industry arguments, it would not ‘ban’ arbitration; instead, it would stop forced arbitration from being imposed as a precondition for obtaining a product, or for obtaining or continuing service or employment, and closing off access to the courts for consumer law claims, employment law claims, civil rights claims, and antitrust claims by small businesses. Once a dispute actually arises and the stakes are clear, consumers, workers, or small businesses could freely choose arbitration, if they determine it to be a better option for them than the courts.

NCL encourages all members of Congress to support the FAIR Act; it is pro-worker, pro-consumer, and pro-small business legislation and helps to bring fairness to the marketplace and restore the basic American right to our day in court.

###
About the National Consumers League (NCL)
The National Consumers League, founded in 1899, is America’s pioneer consumer organization. Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad. For more information, visit www.nclnet.org.