AAA Joins NAF in Stepping Away from Credit Card Arbitration

July 24th, 2009 · 5 Comments

Citing the Wall Street Journal, WorkplaceProfBlog just reported here that the American Arbitration Association has withdrawn from consumer debt collection arbitration. I have not found AAA’s statement on the decision, and I have no idea how this affects existing claims.

Some have guessed that “smoking gun evidence” led to the NAF decision to withdraw. I have no information about that one way or the other, beyond having read the Minnesota complaint against NAF.

With respect to the AAA, I suspect that we’ll see the arbitration industry adopt a wait-and-see approach. Arbitration lists among its primary benefits predictability, security, and enforceability. The combination of Congressional attention and the NAF lawsuit make that value proposition much, much harder today.

Michael Moffitt

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5 responses so far ↓

1 Justin Hosie // Jul 24, 2009 at 9:01 am

Here is a link to the AAA announcement: http://www.adr.org/si.asp?id=5769
2 Benjamin Davis // Jul 24, 2009 at 10:24 am

This is also a ver significant development.
Best,
Ben
3 Victoria VanBuren // Jul 24, 2009 at 1:54 pm

Hello all,

Find the press release by the AAA at our blog Disputing:

http://www.karlbayer.com/blog/?p=3768

Victoria
4 Ross Runkel // Jul 24, 2009 at 2:32 pm

See AAA’s press release: http://www.lawmemo.com/arbitrationblog/2009/07/aaa_confirms_no.html
5 Peter Friedman // Jul 24, 2009 at 5:08 pm

http://tiny.cc/sIR14 :

Testimony off Richard W. Naimark On behalf of the AAAA Domestic Policy Subcommittee Oversight and Government Reform Committee
July 22, 2009:

“. . . it is the AAA’s position that a series of important fairness and due process concerns must be addressed and resolved before we will proceed with the administration of any future debt collection arbitrations. Until such time, the AAA has placed a moratorium on the administration of any consumer debt collection arbitration programs. Further, we suggest that to the extent that the program improvements offered here are implemented, that they are done so not just within the AAA but as part of a broader debt collection arbitration reform.”