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Big Arbitration Firm Pulls Out of Credit Card Business - 7/19/2009 4:53:06 PM
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humbleinspirit
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By Robert Berner
After coming under increasing fire for bias towards major credit-card companies, the nation’s largest arbitration firm involved in adjudicating delinquent credit-card debt has agreed to pull out of the business, Minnesota Attorney General Lori Swanson disclosed on Sunday, July 19.
The settlement with the National Arbitration Forum comes after the Minnesota AG sued the firm on July 14 for consumer fraud, deceptive trade practices, and false advertising. The civil suit, filed in state district court in Minneapolis, alleged conflicting ties between the NAF and debt-collection law firms that represented major credit-card companies. The suit also alleged that New York hedge fund Accretive LLC owned stakes in such collection law firms and the NAF, sending arbitration business between the two.
Under the terms of the consent decree, dated July 17 and signed by the AG and NAF officials, the arbitration firm by the end of this week will stop accepting new consumer arbitrations of any sort. These include arbitrations over disputed credit-card debt as well as new lines of business the NAF has moved into, such as arbitrating consumer debts in healthcare, telecommunications, utilities, mortgages, and consumer leases. The only business NAF can now be involved with is in arbitrating Internet domain disputes, a business it has long been in.
The settlement throws in turmoil an increasingly favored venue for credit-card companies to collect disputed debts from card holders. Since the beginning of the decade, most card companies have included mandatory arbitration clauses in credit-card contracts, forcing consumers to arbitrate rather than use the courts.
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RE: Big Arbitration Firm Pulls Out of Credit Card Business - 7/20/2009 9:45:11 AM
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blessedinnyc
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This is good news for consumers, but what really needs to happen is a system that forces the card companies to go through a small claims court near the cardholder if the parent company has a branch office nearby.
Since small claims court is a form of arbitration and has similar overhead, if credit card companies are interested in a fair hearing, they shouldn't be opposed to going through the standard legal channels.
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RE: Big Arbitration Firm Pulls Out of Credit Card Business - 7/26/2009 10:55:51 PM
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humbleinspirit
Posts: 16732
Joined: 4/13/2005
From: Just Outside of Boston
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Here is more information on this.
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