In a blog at Lawyers USA, Sylvia Hsieh wrote, “In a stunning turn of events, the kingpin of consumer debt arbitration, the National Arbitration Forum, has been knocked out of the consumer debt business amidst allegations of consumer fraud, throwing into jeopardy hundreds of thousands of arbitration awards.” The ink “was barely dry on the settlement when the American Arbitration Association announced on July 22 that it too would be getting out of debt collection arbitration until it can develop standards of practice. Consumer lawyers reacted swiftly.” Dan Edelman, “a consumer rights attorney with Edelman, Combs, Latturner & Goodwin in Chicago, has already filed the first class action against credit giant MBNA/FIA and the debt collection law firm Mann Bracken, alleged to have financial ties to NAF, seeking to set aside thousands of arbitration awards and judgments entered against Illinois consumers since 2007.” Lawyers “handling individual consumer debt cases are also planning to use the recent revelations to get judgments overturned and sue for damages.”
MSTribune: Congress should protect consumers from mandatory arbitration. The Minneapolis Star Tribune editorialized, “Consumers using credit cards, cell phones and other forms of credit — meaning most Minnesotans — got a major victory this week when state Attorney General Lori Swanson announced that the St. Louis Park-based National Arbitration Forum, the country’s largest arbitrator of credit collections, would stop most of its work in the state.” While some “now claim that a day in court may get very crowded if consumers go through the legal process for dispute resolution, it’s preferable to a system that allegedly was gamed in favor of big business against the little guy.” The Tribune argues, “But with credit cards and cell phones knowing no state borders, it’s well past time for Congress to pass a law to better protect consumers.”
From the American Association for Justice news release.