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Arbitration Firms Quit Consumer Debt Biz

Credit card, cell phone companies scramble to collect by themselves

By Rob Quinn,  Newser Staff

Posted Jul 22, 2009 8:33 AM CDT
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(Newser) – Credit card and cell phone companies are scrambling as two major arbitration firms back out of the business of settling consumer disputes, the Wall Street Journal reports. The National Arbitration Forum—accused in a Minnesota lawsuit of misleading consumers into thinking it was impartial—will stop taking cases this week, and the American Arbitration Association says it will follow suit until new guidelines are established.

Consumer-protection advocates have long criticized the process, arguing that it favors companies, and that many consumers often don’t realize they’re relinquishing the right to go to court when they sign contracts with arbitration clauses. Credit card and cell phone companies—which usually require customers to agree to mandatory and binding arbitration—are now expected to face major headaches as the process of collecting unpaid debts is disrupted.

Disputes over unpaid bills may return to the courts as arbitration firms leave the consumer debt business.
Disputes over unpaid bills may return to the courts as arbitration firms leave the consumer debt business.   (Shutter Stock)
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This is an issue beyond any one problem company. It is a systemic industrywide problem. Consumers are giving away rights without even knowing it.
- Minnesota Attorney General
Lori Swanson

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COMMENTS
Showing 1 of 1 comment
kokuaguy
Jul 22, 2009 5:06 AM CDT
Now this is news. Everyone struggling to pay their debts needs to be aware of this and to take advantage of it by demandinng arbitration. All one needs to do is follow the instructions in your agreement and SEND A DEMAND FOR ARBITRATION to the company by certifed mail. A simple one sentence demand letter is all that's required. This will get the company's attention and they will be prepared to bargain and make major concessions regarding a reduced balance, an lower interest rate, and perhaps to keep all credit damaging references off your credit rating or to cooperate in removing any exiisting ones.

 
consumer protection • credit card • contract law • contract • cell phone industry • credit card loans • consumer debt • arbitration • debt collection • National Arbitration Forum • American Arbitration Association

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