NAF arbitration mill (aka rigged kangaroo court) thrown out of California in lawsuit by City of SF

NAF arbitration mill (aka rigged kangaroo court) thrown out of California in lawsuit by City of SF

User: EdMierzwinski ? ? ? ? Date: 10/22/2011 1:53 pm

The arbitration mill favored by Bank of America and other credit card companies known as the National Arbitration Forum? (NAF) agreed Tuesday to a settlement including a permanent injunction against doing debt collection cases in California. As City Attorney Dennis Herrara's press release explains,

"until 2009 [NAF] was the go-to arbitration provider for credit card companies trying to collect debts from consumers. NAF and its affiliates held themselves out as neutral in collections arbitrations but its arbitration administration operation was secretly partly owned by a hedge fund that also owned one of the debt collection companies that used NAF to collect debts. NAF also acted as a one-stop shop for debt collectors, helping them to set up arbitration programs and offering to help them improve their debt collection rates. Under the settlement, the Superior Court has entered an injunction requiring the National Arbitration Forum to stop arbitrating debt collection cases in California forever, and to stop arbitrating employment disputes for three years.

The story of the growth of forced arbitration clauses as a way to keep consumers and workers from enforcing claims against corporate wrongdoers and the key role played by NAF is long and tawdry. You almost need to wash your hands just reading about it.

Minnesota Attorney General Lori Swanson's 2009 complaint against NAF explains the lengths that a web of debt collection lawyers, a hedge fund and NAF went to conceal the true goal of their supposedly neutral arbitration system-- basically, as you guessed, making big bucks from often innocent consumers.

Here's an entry from our friends at the Poptort.com that explains some of the efforts of General Swanson against NAF and Senator Al Franken (MN) against employment arbitration used by government contractors. The blog links to other key resources.?

Unfortunately, as PopTort explains, that fight is not yet over. On the good news front, the Consumer Financial Protection Bureau, after it conducts a study, has authority to ban or regulate the use of arbitration clauses.

Source: http://feedproxy.google.com/~r/uspirg/consumer-blog/~3/ORbRC97XX9U/naf-arbitration-mill-aka-rigged-kangaroo-court-thrown-out-of-california-in-lawsuit-by-city-of--sf

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