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U.S. PIRG Consumer Blog
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September 27, 2007
MBNA, others abuse arbitration in credit card and other contracts, report finds
A first-of-its-kind analysis of data available only in California has lifted the veil on the results of cases before arbitrators adjudicating disputes between consumers and credit card companies. Most of the cases were brought by the companies seeking to collect alleged debt, even from identity theft victims who never had accounts. From Public Citizen: Consumers who seek justice in disputes with their credit card companies shouldn't expect to find it in binding mandatory arbitration (BMA); in cases decided in California by a major arbitration firm over a four-year period, consumers lost 95 percent of the time, a new Public Citizen report shows.[...] "People shouldn't have to give up their legal rights just to get a credit card," said Public Citizen President Joan Claybrook. Previous blog on the introduction of the Arbitration Fairness Act, HR 3010 and S 1782 by Rep. Hank Johnson (D-GA) and Sen. Russ Feingold (D-WI). Visit the PIRG-backed Givemebackmyrights.org campaign website for more information about how unfair mandatory arbitration clauses hurt consumers, small farmers and employees. Excerpt from the Public Citizen release:
The report focuses on the National Arbitration Forum (NAF), the go-to arbitration forum for the credit card industry and a major player in the California arbitration business. Between Jan. 1, 2003, and March 31, 2007, arbitrators working for the Minneapolis-based NAF ruled for businesses in 95 percent of the California cases examined. In fact, 90 percent of the NAF cases were handled by just 28 arbitrators, who awarded businesses $185 million. One arbitrator handled 68 cases in a single day -- an average of one every seven minutes, assuming an eight-hour day -- and ruled for the business in every case, awarding 100 percent of the money requested. The same arbitrator is an attorney with his own practice serving business and corporate clients.
Posted by Ed Mierzwinski at September 27, 2007 02:17 PM
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