National Arbitration Forum Pulling Out of Consumer Debt Collection, for Now
Recently, the Wall Street Journal reported that arbitration groups, such as the National Arbitration Forum, are pulling out of agreements with credit card and cell-phone companies to resolve disputes. The arbitration companies are waiting until new guidelines are established in the wake of controversial handling of consumer debt collection disputes. The pull-out happened quickly after the Minnesota Attorney General’s Office filed suit against the National Arbitration Forum in Mid-July for, among other things, not disclosing its financial ties to debt-collection companies. The National Arbitration Forum reports that companies prevail in over 94% of such consumer cases and that it processed over 214,000 consumer-debt collection claims in 2006. For the entire Wall Street Journal article, entitled Credit Care Disputes Tossed Into Disarray, click here.
Arbitration is considered as a less expensive, less formal, and quicker alternative to the traditional court process of resolving disputes. A neutral arbitrator is the cornerstone of the arbitration process. Many consumers choose to arbitrate, while others are forced to arbitrate by terms of their business contracts. The recent examples show the need to protect the process. Consumers are most vulnerable in both being forced to arbitrate and then losing their case before a potentially biased arbitrator. This is not the way arbitration was envisioned. At least for now, credit card and cell-phone companies will reflect on that process, which will hopefully translate to increased fairness for consumers.
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If you or a loved one have experienced adverse consequences as a result of consumer arbitration, please contact our firm for a free consultation and information. To contact attorney Suzy Scheller, directly please send an email to sscheller@prslegal.com, or call Suzy at 612.767.7500.