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The Exodus of Credit Card Arbitration Firms
Friday, July 24th, 2009After coming under attack over whether their processes were fair, two large arbitration firms, the American Arbitration Association (AAA) and the National Arbitration Forum (NAF), recently said they were suspending their credit card arbitration activities. This could lead to more options for consumers.
Mandatory arbitration has long been a sore point for many consumer advocates because most customers don’t realize that the fine print of their credit card agreements waive their rights to sue the card companies when a dispute arises. In addition, consumer advocates feel that the arbitrators ultimately do not act impartially, being biased towards the credit card companies.
It’s unclear whether the withdrawal of these large arbitration firms will open the door for customer lawsuits. From a practical standpoint, though, some experts say that no other arbitration firm is large enough to pick up the slack to replace the case load of the firms leaving the field, so by default arbitration will become a scarcer option.
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December 18th, 2009 at 6:08 pm
[...] this year, two large arbitration firms announced they would no longer be handling credit card collection disputes. Now comes word that, as a result of a huge class action lawsuit against the major banks, many of [...]