OCP Warns of Forced Arbitration Clauses

The county’s Office of Consumer Protection is warning consumers about potentially deceptive and misleading information in receipts that some Jiffy Lube locations provide for purchasing oil changes or auto repair services.

An investigation by OCP, prompted by consumer complaints, showed that “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,” OCP said in a press release. “However, this “forced arbitration” clause fails to disclose that the mediation and arbitration service is actually owned and operated by the merchant’s attorney.”

OCP said they became aware of Jiffy Lube’s forced arbitration while investigating complaints from two customers alleging that their vehicles were damaged as a result of improper oil changes. Efforts were made to resolve the matter with the merchant and his attorney, OCP said.

“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 in a statement. “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.”

The Jiffy Lube locations in Montgomery County, including a location on New Hampshire Ave. in Takoma Park, are individually owned franchises. Jiffy Lube International, Inc. is a franchisor that oversees more than 2,000 independently owned service stations in the U.S. and Canada, according to OCP.

The county’s Office of Consumer Protection licenses all auto repair facilities, towing firms and new home building operators in Montgomery County, and offers free, neutral mediation services for consumers and merchants. More information can be found on OCP’s website.

Graphic: © OpturaDesign / Adobe Stock

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