AAA Exits the Consumer Debt Collection Business

The American Arbitration Association has announced it was dropping its arbitration program for consumer debts. This comes only a few days after the National Arbitration Forum announced it was dropping its consumer debt arbitration program. Most of the cases involved credit card and cell phone debts. This is great news for consumers who could not get a fair hearing at AAA or NAF. Both had rigged their procedures in favor of the banks and corporations that paid their fees. Consumers lost 94% of the 214,000 cases processed by NAF in 2006.

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Arbitration Forum Exiting Credit Card Business

The Minnesota Attorney General sued the National Arbitration Forum alleging it was essentially a front for various large banks and collection agencies. NAF falsely held itself it out to be a neutral forum for processing creditors’ claims against consumers. On July 19, 2009, the AG announced that NAF has entered into a settlement of the lawsuit under which NAF will immediately stop accepting consumer arbitrations of any sort. This is wonderful news for consumers and a major step towards getting rid of all mandatory arbitration clauses in consumer contracts.

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Minnesota Atty General Suit Alleges the National Arbitration Forum Is Fraudulent

Today, the Minnesota Attorney General sued the National Arbitration Forum, the major arbitration firm that banks use to prosecute consumers who owe credit-card debt. The AG’s complaint states that NAF represents to the public, the courts, and consumers that it is independent, operates like an impartial court system, and is not affiliated with any party. However, what the consumer does not know is that NAF works alongside creditors behind the scenes against the interest of consumers. The truth is that NAF is actually controlled by major collection law firms that represent credit-card companies. A New York hedge fund known as...

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More Chatter About the San Francisco City Attorney’s Suit Against The National Arbitration Forum

The San Francisco City Attorney apparently has some enthusiastic cheerleaders for its recent suit against the National Arbitration Forum (NAF), which we discussed here. Credit Slips is a terrific credit and bankruptcy blog which contributors are mostly law professors with deep knowledge about their topic. Professor Bob Lawless’s post today provides links to previous posts in the Credit Slips blog about the NAF. Those posts include some nightmarish horror stories about consumers’ experiences with arbitration. He also notes the NAF’s high win rate for creditors and describes how the NAF acts almost as if they are a disguised debt collection...

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National Arbitration Forum Sued by San Francisco City Attorney

Our consumer law firm has learned that if a potential client’s dispute is covered by an arbitration clause, we generally won’t take the case. There are several reasons. First, the company on the other side uses the arbitrator frequently. Since the company wouldn’t continue to use the arbitrator without good results, the arbitrator has an incentive to rule for the company. Second, there’s no requirement that the arbitrator follow the law. If an arbitrator doesn’t like a consumer’s case, that’s the end of it; there is no right to an appeal as there is in court. Third, arbitrations can be...

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