31 Jul Is Credit Card Arbitration Fair and Impartial?
For many years consumer advocates have claimed that the arbitration provided in credit card disputes was not fair to the consumer. It seemed that the arbitrators always just rubber stamped the claims made by the credit card companies.
Two weeks ago, Minnesota Attorney General Lori Swanson filed a complaint against one of the biggest Arbitration companies, the National Arbitration Forum (NAF). In her complaint she alleged that the company had financial ties to the credit card and debt collection industry and worked with them to deny consumers complaints.
Guess what? AG Swanson was right! The NAF and other affiliated organizations are owned by a New York hedge fund that also owns major debt collection companies. So the judge (arbitrator) and the prosecutor (collection agencies) are owned by the same company!
After this was revealed, both the NAF and the American Arbitration Association has agreed to stop arbitrating consumer credit card disputes.
Congress is working on a bill to reign in this sort of consumer abuse. Contact your representative to suggest that they support the Arbitration Fairness Act and other similar legislation.
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