Forced Arbitration Roadblock: A Wrongful Credit Report Pull? Consumer’s Access to Justice is Blocked by Comcast

This month, a district court in Pennsylvania ruled for cable company Comcast to enforce an arbitration clause against a consumer who said he never had a Comcast account. The consumer had filed a class action suit against Comcast for allegedly pulling his credit report without permission, a violation of the Fair Credit Reporting Act.

James Shelton claimed that Comcast called him in 2018 to solicit him to purchase Comcast services. Mr. Shelton’s father opened the family Comcast account in 2006 and was the only one who signed the Subscriber Agreement. According to Mr. Shelton, Comcast never indicated that it would pull his credit report during the call, nor did he give Comcast permission to do so. But soon after, Mr. Shelton alleged, Comcast pulled his Equifax report and placed a hard inquiry on it.

According to his complaint, Mr. Shelton immediately contacted Comcast to try to get the hard inquiry removed from his credit file. Not only did Comcast not request to have it removed, but it also allegedly placed a second hard inquiry on Mr. Shelton’s credit report.

Mr. Shelton claimed that Comcast has a history of doing the same thing to other consumers, damaging their credit scores. To seek justice for himself and others who may have experienced the same harm, Mr. Shelton filed a class suit against Comcast. In response, Comcast filed a motion to compel arbitration under the forced arbitration clause of its subscriber contract.

Arbitration, unlike going to court, is a closed-door process in front of a decisionmaker that is often chosen and paid for by the corporate party. Corporations use forced arbitration to block claims against it, including class action claims like Mr. Shelton’s where many consumers have potentially suffered the same small harm that would be too costly to pursue individually.

The district court held that Mr. Shelton had not entered the agreement with Comcast himself, but found that just by using Comcast’s services, he “knowingly exploited” it and therefore agreed to be bound by its terms, including the arbitration clause and class action ban.

Ultimately, the court found that Mr. Shelton could be forced into arbitration. Mr. Shelton’s case has been ordered out of court, likely extinguishing the opportunity to discover if he was harmed, and if other consumers were affected in the same way by the cable company’s practices.

Congress should act to ensure claims like Mr. Shelton’s are able to move forward in court. Last session, the Forced Arbitration Injustice Repeal Act, which would ban forced arbitration in consumer contracts, passed in the House of Representatives and was introduced in the Senate. Both chambers of Congress must reintroduce and pass this bill as soon as possible so consumers are not blocked from accessing justice.