I just got a notice from Bank One that says they are about to charge off my account. If they do my account 1. Will be sent to a law firm empowered to file arbitrtion claims. They say it can result in an award that can be entered as a judgement and enforced to the fullest extent of the law. The second alternative they listed was the account will be sent to a debt collection agency. This is the first time I've seen arbitration as a threat. What should be my next move?
Is it yours, and can they validate? If yes to both, determine whether you can afford to settle for a percentage of the debt (this would depend on the amount and age of the debt). How much and how recent was delinquency?
I have a similar problem with them. Look here for my posts on the subject over the last two days. But, they told me that they will either send it to a collection agency or to an attorney for collection. They have not used the word "arbitration" with me. My debt is over $13,000 and will charge off this week. How big is yours and when will it charge off? I get calls from them every two days - do you? I also posted my question at Creditboards so you may want to follow that post also. Some of the people who post there do not post here. Sounds like you and I need to stay in touch.
Your next move would depend on whether the debt is valid or not. The attorney who files for Arbitration is still a "Debt Collector" as defined by FDCPA, so hold the attorney to the letter of the law. Remember, as an attorney it would be hard for him to claim in court that he didn't know what FDCPA rules are and taht they applied to him. "Counselor, you ar an attorney - you are SUPPOSED to know the law". Some creditors are using Arbitration as the new way of getting judgements because they can manipulate who the Arbiter is and hopefully get one who will just be a rubber stamp. Some attorneys are using arbitration to get around the silly 4th Amendment rule that you be sued in your state of residence. In any instance, the procedural rules and evidentiary rules in Arbitration are much more lax (and therefore more subject to abuse) than in a Courtroom) If they use American Arbitration Association Arbiters you should (read that MUST) take an active role in finding out about the Arbiter's background and objecting to the Arbiter if you see even a bit of pro-creditor bias. You should also seek to have the AAA transfer the Arbitration to a location near you rather than near the creditor. An AAA Arbitraion award can be turned into a Judgement very easily, so don't consider this a bluff on their part. You might even see when the creditor slipped the Arbitration part into their Account Terms and see if you had any charges after then. You can argue (probably successfully) that you did not agree to that change of terms by not using the account.
