Class-action suits filed against credit card debt arbiter
Three class-action suits have been filed against the largest credit card debt arbiter in the country.
The suits claim that the National Arbitration Forum (NAF) concealed ties it allegedly has with the credit card debt industry and that it handed down unfair rulings in credit card debt arbitration cases.
The class-action suits come after the NAF settled a lawsuit filed by Minnesota Attorney General Lori Swanson that also alleged the firm had dubious connections to the credit card debt industry.
The bulk of the suits deal with credit card debt arbitration clauses. Arbitration clauses are written in to credit card agreements and take away a card holder’s right to settle debt disputes in a court.
Instead, a third-party arbiter, such as the NAF settles the credit card debt disputes. Swanson’s suit claimed that the NAF worked with card companies to include arbitration clauses in agreements and also convinced companies to choose it as the arbiter.
Furthermore, the attorney general’s suit claimed the NAF had financial ties to the debt collection industry through a New York private equity firm. That firm had invested money in the NAF and also had a majority stake in a debt collection firm.