Many arbitration agreements, in an attempt to seem more fair, include provisions allowing the consumer to opt out — but only if they do so right away after signing up.
Many arbitration agreements require sending a letter to opt out, which must be sent within 30 days of signing up (or within a certain amount of time from changes the company makes to the terms).
Most people do not have the time or energy to write a letter to opt out of something they think will never affect them. But if you do not opt out, that can mean that (1) even if someone else has the same problem as you and sues the company for class-wide relief, you cannot benefit from their actions; (2) even if there is a class action settlement, you cannot participate and get your payout; and (3) if a problem arises, you may never get to obtain relief through a civil lawsuit in court.
Below is a template that you can send to a company when you spot an arbitration agreement in their terms. Remember, you should customize it by putting in your own name and the section of the contract.
Below is a simple template for opting out of arbitration when you first sign up.
Generic Template
To whom it may concern:
On [DATE], I created an account on your website. I was prompted to accept the Terms of Use, including a section that includes an arbitration agreement.
I REJECT THE ARBITRATION AGREEMENT. I do not agree to resolve any disputes through arbitration.
My name is [INSERT NAME]. The email address associated with my account is [INSERT EMAIL]. I am exercising my right to opt out in accordance with the agreement:
[PASTE SECTION OF TERMS AND CONDITIONS]
Although I hope never to have any dispute with your company, I refuse arbitration as a matter of principle.
Regards,
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