Arbitration and other alternative dispute resolution methods for disputes arising out of savings finance contract (In the context of consumer law)

This study explores the resolution of consumer disputes arising from savings finance contracts through arbitration and other ADR methods. The savings finance system is vital for long-term savings and housing finance, making effective dispute resolution crucial for both consumers and financial institutions. In Türkiye, current remedies for consumer disputes are limited to consumer committees, compulsory mediation, and court proceedings. However, these mechanisms are mandatory and do not prioritize the parties will. The study aims to assess the adequacy of existing remedies in Türkiye and explore the applicability of ADR methods to develop more effective mechanisms. It also examines similar regulations in other countries, focusing on consumer finance disputes, and offers recommendations for improving resolution mechanisms in Türkiye. The research compares the arbitrability of consumer disputes within the legal systems of Germany, Switzerland, the UK, the USA, and the EU. While currently Türkiye's Court of Cassation considers consumer disputes as non-arbitrable, other countries have developed consumer-friendly arbitration practices. In Germany, consumer arbitration agreements must be in a separate document; in Switzerland, arbitration agreements concluded after the dispute has arisen are valid; in the UK, arbitration agreements below certain monetary thresholds are considered "unfair terms"; and in the USA, arbitration is widely practiced but varies from state tot state. The study also suggests creating sector-based ADR mechanisms for consumer disputes in Türkiye. In this context, if the necessary legal infrastructure is provided, an arbitration center specific to the savings finance sector may enter into an agreement with the professional association of savings finance companies and an arbitral institution may be established within the arbitration center where serial arbitration rules will be applied. This model would protect consumer rights while ensuring faster and cost-effective resolution of financial disputes.