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The End of Compelled Consumer Arbitration?

By Robert J. Ambrogi

Even the Manhattan Institute-sponsored blog PointofLaw.com is conceding the future looks bleak for mandatory consumer arbitration. Three major developments this week, capped by a congressional hearing yesterday, throw into question the fairness of the process and the neutrality of at least one group of supposed neutrals. Let's recap the week's events: On Monday, Minnesota Attorney General Lori Swanson announced that she had reached an agreement with the National Arbitration Forum by which it would immediately get out of the business of arbitrating credit card and other consumer collection disputes. A week earlier, Swanson had filed a lawsuit against the NAF -- the largest arbitration company in the country handling consumer credit disputes -- alleging that the company had hid from the public its extensive financial ties to the collection industry. On Tuesday, fresh on the heels of Swanson's announcement, the American Arbitration Association announced that it would stop participating in consumer debt-collection disputes until new guidelines are established. The AAA's decision was first reported by the Wall Street Journal and then confirmed yesterday in testimony before a subcommittee of the U.S. House Committee on Oversight and Government Reform. At yesterday's hearing in Congress, U.S. Rep. Dennis Kucinich, D-Ohio, the committee...

Full post as published by Legal Blog Watch on July 23, 2009 (boomark / email).