An AG’s Quick Victory: Arbitration Forum Exits Credit Dispute Business

Mpls Atty
Jul 20, 2009 12:18 PM CST

Unfortunately, this is an attorney general that has been slammed (and hard) for busting a union in her office.  The Minnesota Legislative Auditor confirmed last year that she had ordered attorneys to falsify affidavits, file meritless lawsuits for good press, etc.  She’s a bad apple, and while I’m no fan of NAF, I think it’s unfortunate that progressives are willing to turn a blind eye to the awful things that Lori Swanson has done in her office just because we dislike NAF.  NAF is terrible, but Lori Swanson has shown that her tactics aren’t any better.

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CS
Jul 21, 2009 11:56 AM CST

From what I have read of the inherent bias in private industry run arbitration, NAF was the Darth Vader of credit card arbitration firms.  But they are hardly the only group doing these things, for nearly all such groups rely on repeat business from corporations for their funds.  This is a conflict of interest that should never have been allowed.  The system only became more biased as time went on.  Similar exposure of bias and other problems has been done by Public Citizen on not only NAF, but Construction Arbitration Services (CAS) and others.  Public Citizen exposed this firm twice, once I believe in about 2004, and most recently this year in their report “Home Court Advantage.”  For anyone who thinks it’s just as easy as crossing out an arbitration clause think again; if courts had enforced the principle of ‘contract of adhesion’ and other issues of why an arbitration clause shouild be unenforceable we would not be here having this discussion now.  The site FairArbitrationNow.org has a boat load of info including the report mentioned above on housing and arbitration.  I have heard many home buyers say they managed to avoid an arbitration clause when buying a newly built house, only to be dismayed after closing when the builder’s “gift” arrives, the 10 year warranty with an arbitration clause.  FEW people get the courts to let them out of arbitration even when they didn’t see or sign the clause in the warranty. 

Nearly everything we buy has a hidden arbitration clause, that even some lawyers don’t understand takes away their rights.  It’s never marketed as what it is—a rigged “justice” system run by corporations, it’s touted instead as being faster, fair, and cheaper.  Many consumers find out too late that it’s anything but.  Arbitration was never meant under the Fed. ARbitration Act to operate this way.  Corporations have exploited it to their advantage in a big way.  This needs to be fixed.  That is why the Arbitration Fairness Act needs to pass.

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