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A Big Win for Consumers: NAF Leaves Arbitration Business

posted by Bob Lawless

Credit Slips bloggers have written a number of posts about the National Arbitration Forum (NAF) (here, here, here, here, here and here). NAF was a business friendly--and especially a credit card company friendly--arbitration forum, but that looks to be a thing of the past. Last week, after a lawsuit was filed by the Minnesota attorney general NAF agreed in a consent decree to stop taking any consumer arbitrations. Deepak Gupta over at the always insightful Consumer Law & Public Policy Blog has has an informative summary on the story. NAF exiting consumer arbitration is great news.

Earlier this week, the not-for-profit American Arbitration Association (AAA) also announced it would stop accepting arbitrations in consumer debt-collection cases until standards or safeguards are established. Big changes appear to be afoot.

Comments

Also, Congressman Kucinich's Oversight Committee released a new report on consumer debt arbitrations by NAF. It condemns many of NAF's practices, finding that among other things the NAF is refusing to comply with California law that requires the disclosure of information about arbitration outcomes.

http://domesticpolicy.oversight.house.gov/documents/20090721154944.pdf

Thanks to Jean Sternlight (UNLV) for sending it to me.

Wow, crazy news. Silencing consumers and regulating what they can and can't say. Doesn't sound like a change that's for the good...

-Marc

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  • As a public service, the University of Illinois College of Law operates Bankr-L, an e-mail list on which bankruptcy professionals can exchange information. Bankr-L is administered by one of the Credit Slips bloggers, Professor Robert M. Lawless of the University of Illinois. Although Bankr-L is a free service, membership is limited only to persons with a professional connection to the bankruptcy field (e.g., lawyer, accountant, academic, judge). To request a subscription on Bankr-L, click here to visit the page for the list and then click on the link for "Subscribe." After completing the information there, please also send an e-mail to Professor Lawless (rlawless@illinois.edu) with a short description of your professional connection to bankruptcy. A link to a URL with a professional bio or other identifying information would be great.

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