Consumer Law

More on NAF, AAA, and Forced Arbitration

By Deepak Gupta

by Deepak Gupta

Yesterday, during NPR's All Things Considered, reporter Wade Goodwyn and host Madeleine Brand discussed the recent developments involving NAF and AAA, as well as the Arbitration Fairness Act. Goodwyn also filed another story this morning including excerpts from the testimony at yesterday's House Oversight Commitee hearing. Marketplace also had a shorter piece including an interview with Public Citizen researcher Taylor Lincoln. (The latter piece also quotes a credit industry expert who claims that making arbitration voluntary would increase the cost to consumers, but says nothing about the extent to which the threat of class actions would deter credit card companies from overcharging consumers or engaging in other unfair practices.)

One aspect of the media coverage is worth noting.  Although reports, including NPR's, have repeated the Wall Street Journal's report that AAA is following NAF in categorically pulling out of all consumer debt cases, the AAA itself has yet to release a definitive statement to that effect -- at least as far as I can tell.  AAA's letter to the Minnesota Attorney General says only that "the AAA is not currently administering any any large debt collection programs of the type described in your letter, and, in fact, the AAA has only administered one such program which ended in June of this year."  AAA's written testimony at yesterday's House hearing included a similarly cryptic statement.  

Taken at face value, AAA's story is that it independently decided to pull out of consumer debt cases one month before the Minnesota lawsuit, but only decided to mention it the day before yesterday.  It's a coincidence, in other words, that the story was first reported in the Journal a couple days after NAF's decision and on the eve of a hearing in Congress. I stayed for most of yesterday's hearing and didn't hear AAA directly address this point.

Full post as published by CL&P Blog on July 23, 2009 (boomark / email).