June 1, 2015 6:30 AM EDT

A week ago, the FTC issued a ruling that was hailed by consumer advocates as a victory for car buyers and owners everywhere — but this is a bullet most consumers probably don’t even know they dodged.

If you have no idea what this is about, that’s not surprising. The agency’s action followed a review of the “Interpretations of Magnuson-Moss Warranty Act,” which, admittedly, sounds like a snoozer. This ruling covers a few different elements of car warranties. In brief, they need to be easily understandable and accessible to customers, and they have to let owners use parts and mechanics of their choice (rather than stipulating only “authorized” parts or technicians).

But the part that has groups like the National Consumer Law Center and the National Association of Consumer Advocates so excited pertains to binding arbitration, which is one of those phrases that tends to make people’s eyes glaze over. Technically, the rules “set standards for any informal dispute settlement provisions in a warranty.” In plain English, this means the FTC has reaffirmed — over the auto industry’s objections — that it put the kibosh on sticking fine print in warranty contracts that require an owner to sign away their right to sue if things go awry.

Binding arbitration has become an increasingly used tactic in all kinds of contracts, from telecommunications to financial services. Businesses say it saves everybody the time, expense and hassle of a lawsuit, but consumer advocates contend that the little guy tends to get the short end of the stick, since arbitrators are paid by the companies and have a strong financial incentive not to bite the hand that’s feeding them. Consumers lose arbitration proceedings a whopping 95% of the time, one study from 2007 found.

“Secret, unreviewable arbitration proceedings before arbitrators paid by industry could keep unsafe cars on the road,” National Consumer Law Center attorney David Seligman said in a statement about the rulings.

The FTC came to its conclusion by looking at previous legal language that addressed the use of arbitration. Basically, they decided the option for suing has to be preserved because the verbiage used refers to arbitration as being the first step available to a wronged consumer, not the only one. “Arbitration should precede but not preclude a subsequent court action,” the agency says.

Encouraged by this victory, these consumer groups — as well as some lawmakers — say regulators like the Consumer Financial Protection Bureau should implement a similar rule striking down the use of forced arbitration in financial services products. Nearly three dozen members of Congress also recently got involved, sending a letter to CFPB director Richard Cordray urging him to ban the practice in financial services contracts, saying, “These clauses …are designed to stack the deck against consumers.”

In a report the agency released in March, the CFPB found that the prevalence of arbitration clauses is especially high in prepaid cards and payday loans, financial products that typically target lower-income and financially unsophisticated people. Likewise, the vast majority of private student loan and prepaid cell phone contracts also demand that consumers waive their right to sue.

“Forced arbitration is simply unfair and everywhere in consumer financial services,” Christine Hines, consumer and civil justice counsel with advocacy group Public Citizen, said in a statement about the findings urging lawmakers to ban the practice.

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