July 22, 2009
AAA, NAF Halt Consumer Debt-Collection Cases
Today's Wall Street Journal (subscription required) reports:
The American Arbitration Association said Tuesday it will stop participating in consumer-debt-collection disputes until new guidelines are established. Its decision came two days after another big group, the National Arbitration Forum, said it would stop accepting new cases as of Friday.
The NAF halted its consumer debt-collection cases only a week after the Minnesota attorney general filed suit against it alleging consumer fraud. The arbitration provider has been plagued by allegations that it had ownership and financial ties to the debt collection firms, and that it routinely dropped from its rosters arbitrators who ruled in favor of consumers. For NAF to have caved so quickly -- I'm betting there was smoking-gun evidence that NAF wants to bury.
This doesn't directly affect employment cases or other consumer cases, but may do so indirectly as Congress considers the pending Arbitration Fairness Act.
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