NAF Can't arbitrate credit card debt anymore!

Minn. firm can't arbitrate credit card, other debt By JEFF BAENEN, Associated Press Writer Jeff Baenen, Associated Press Writer Sun Jul 19, 4:43 pm ET MINNEAPOLIS â?? Attorney General Lori Swanson said Sunday that her office reached a sweeping legal settlement that requires a Minnesota company to get out of the business of arbitrating credit card debts and other consumer collection disputes nationwide. The agreement comes less than a week after Swanson sued the National Arbitration Forum over its handling of debt disputes between consumers and credit card companies. The lawsuit accused the St. Louis Park-based firm of violating state consumer fraud, deceptive trade practices and false advertising laws by hiding financial ties to collection agencies and credit card companies. "To consumers, the company said it was impartial, but behind the scenes, it worked alongside credit card companies to get them to put unfair arbitration clauses in the fine print of their contracts and to appoint the Forum as the arbitrator. Now the company is out of this business," Swanson said. "I am very pleased with the settlement." The settlement takes effect Friday. The National Arbitration Forum denied Swanson's accusations but said it decided to voluntarily stop administering consumer arbitration disputes because of mounting legal costs. Mike Kelly, CEO of Forthright, which provides administrative services for the National Arbitration Forum, said consumers will now have "no meaningful alternative to costly and unpredictable litigation." Kelly said the company doesn't have the resources to continue defending itself against state attorney generals, class action lawsuits and on other fronts. He said the forum remains committed to consumer arbitration, arguing it's the best and most affordable option for consumers. "Without access to arbitration, consumer disputes will now be forced into an overcrowded and underfunded legal system, where many consumers who cannot afford attorneys will have to navigate complex court procedures," he said in a statement. Swanson had said the National Arbitration Forum handled more than 214,000 collection claims in 2006, 60 percent of which were filed by law firms with ties to the collection industry. Under the settlement, the company must stop accepting any new consumer arbitration or taking part in processing or administrating any new consumer arbitration nationwide. The company must stop administering arbitration involving consumer debt including credit cards, consumer loans, utilities, telecommunications, health care and consumer leases, Swanson said. The settlement allows the company to continue arbitrating Internet domain name disputes, personal injury protection claims and cargo disputes. Those areas were not part of the lawsuit. Swanson also said she has been invited to testify Wednesday before the Congressional Committee on Oversight and Government Reform. She said she will ask Congress to bar the use of mandatory pre-dispute arbitration clauses in consumer contracts.

 

What makes you think that any message board or the internet had anything to do with their downfall? Quite frankly I think it was a matter of political grandstanding more than anything else. NAF's days were numbered anyway. They were being heavily investigated by the feds whose investigations were about to result in new lawmaking by the congresscritters. The major problem the feds were having was that almost every solution they could have come up with would have been likely to get overturned by the courts. Congress has been struggling with outlawing arbitration clauses in credit card and other agreements for over a year now and were getting nowhere because of all the opposition from the banks and other lenders. Part of the problem is that credit cards and NAF isn't the whole story. They want to forbid arbitration clauses in a broad range of other areas such as vehicle lease agreements and many other types of consumer related issues.

They are meeting heavy resistance all the way so they probably needed a whipping boy to help further their agenda. NAF was the most publicly visible target so they went to the Attorney Generals to see who would do their work for them and get some publicity for their cause. All they have to do is get enough publicity and public anger whipped up and they can do just about whatever they want, reasonable or not.

Look at the tobacco settlements issue if you don't believe what I say. Bill Clinton was a sure loser in his bid for re-election. He was gone unless he could come up with a winning cause. Al Gore convinced a couple of his cronies that Clinton could win in a landslide if he could be talked into going up against big tobacco who had the most powerful cadre of lobbyists of all, not only in Washington but everywhere else too. Gore and others spent several months trying to convince Clinton that going against big tobacco was the way to win the next election but he was having none of that until somebody came up with the id. ea of claiming that they were doing it for the kids. That was an argument Clinton could understand and he finally agreed. So who did they get to do the hatchet job for them? The nation's Attorney Generals, that's who. Quite frankly I think that is what went on here too. NAF saw the handwriting on the wall and knew they couldn't fight big government and win so they just folded up their tent and took off without a whimper.

NAF isn't the one that got your money. You were going to lose that no matter what you did. Even if NAF had taken your money you still wouldn't get anything out of it if they had fought and lost. Like it or not, you were not the injured party here. The injured party was the state of Michigan. NAF wisely picked up all their money and went hopping off down the bunny trail while the getting out was good.

 

If you live in Minn.then maybe you could get the judgment vacated then go after the lawyer and the debt collector to get your money back. If not then it could prove almost impossible to do anything about it.