Debt arbiter AAA to refrain from accepting new cases
The American Arbitration Association stated it will not take new cases until new guidelines are implemented. The announcement comes as the nation’s largest credit card debt arbitration firm has also decided to refrain from accepting new debt disputes.
The National Arbitration Forum (NAF) will no longer accept arbitration cases as the result of a lawsuit settlement. The suit, which was filed by Minnesota Attorney General Lori Swanson, claimed that the NAF misrepresented its claim of impartiality.
The suit alleged the NAF worked with credit card companies to place mandatory arbitration clauses within credit card agreements, and also had card companies choose it as the judge of debt disputes.
The suit also alleged the NAF had ties to the credit card collection industry. A firm that had investments in the NAF also had a majority interest in a debt collection firm, which had acquired the collections operations of a large law firm.
According to the attorney general, the NAF handled 214,000 arbitration cases in 2006, of which 60 percent were filed by law firms with alleged connections to the credit card debt arbiter.