Just before the Memorial Day holiday weekend, Microsoft announced it has changed its end user license agreement so that customers can no longer file consumer fraud class action lawsuits against the software giant. With its Windows operating system used by more than 80 percent of the personal computer market worldwide, this change affects millions of individuals. This also pertains to users of the company’s popular Xbox products.
A consumer fraud class action lawsuit involves cases where fraud is widespread and typically includes hundreds, if not thousands, of individuals who claim damages due to the actions of a company. It is an effective, efficient way to receive fair compensation for such a large group of victims. And, with such potential clout, class action lawsuits can make the company end its unlawful practices.
Microsoft’s change to its end user license agreement, however, takes away this avenue for its customers. Those signing the agreement waive their rights to a class action lawsuit and must seek compensation in either small claims court or through arbitration. In either situation, the injured parties typically represent themselves, left to face Microsoft alone without the benefit of experienced trial attorneys.
Unfortunately for consumers in this country, Microsoft’s actions are not isolated. Other corporations have taken similar steps in an effort to reduce consumers’ legal rights and to avoid paying fair and just compensation for acts of fraud. On the other hand, the Arbitration Fairness Act, which would remove arbitration clauses in consumer contracts, is being considered by Congress. And the Consumer Financial Protection Bureau, a new federal consumer watch-dog agency, may implement a rule preventing financial services firms and credit card issuers from forbidding class action lawsuits.
Before signing any agreement with a company, individuals should read them carefully and consider all potential consequences, and may want to contact an attorney if they suspect they’ve been a victim of fraud.