Arbitration Information!!!

[Minnymouth]

Many have asked questions regarding arbitration....

Here is a link regarding the National Arbitration Forum (Foundation) which many companies use in litigation of accounts....... this is seldom used.


www. arb-forum.com



Check it out, add your comments to this thread to help others.

[flyinbroke]

The landscape has drastically changed with the NAF pretty much being shut down for arbitration. For those who don't yet realize, the Minnesota AG sued NAF for being in bed with the credit card issuers and they were shut down from credit card arbitration. Arbitration election means both parties lose the right to litigate in the courts.

The only two who can legally take on credit cards are AAA and JAMS; AAA, deciding they did not want to wind up in the same boat as NAF, will not take arbitration initiated by the credit cards or collectors. They will take on arb initiated by the consumer. JAMS is iffy, but for the most part does not appear to be taking creditor initiations. They also will take on consumer initiated arbitration.

JAMS costs the consumer 250 to initiate, and costs somewhere near 2-3K for the creditor just to start, with arbitrators costing the creditor 500 an hour. AAA is less expensive but the expenses still add up fast. If the creditor refuses to pay, it cannot be pursued further and will be dismissed. However, they still cannot sue because arbitration cancels out the right to litigate and a suit is an FDCPA violation.

The added bonus is that arbitration is won (like civil court) by a preponderance of the evidence...meaning that many consumers are beating the creditors at their own game. Smaller balances are often settled...or dropped entirely because it is not cost effective to pay JAMS 3K for a 1K debt. Larger balances may be fought for, but are often dismissed because the creditor may not have all (or any) of the paperwork...missing contracts and applications and statements don't make much with regard to preponderance of the evidence. If the consumer can counter with FDCPA and state violations, that is gravy. Even if the consumer loses, the creditor has to go through the courts to get a judgment based on the arbitration findings.

Bank of America, HSBC, and several other banks, realizing their automatic victory free ride is OVAHHH, have now completely dropped arbitration from their agreements. It no longer works in their favor so they have abandoned it.

(Something that could make interesting case law is the clause in old agreements, which says that the arb clause survives all changes in contract or agreement. Makes one wonder if this means the entire agreement can be stricken.)

[GoingDown]

For anyone with credit card accounts which had an arbitration clause, it is often suggested on other forums to include this sentence in any letter disputing the validity of the debt or in any cease and desist communications letter...

"There is an underlying arbitration clause in the underlying credit card agreement, and I hereby exercise it for any dispute between us, waiving your right to sue over the dispute."

Debt collectors now want to avoid arbitration as much as possible, and when they see this in a letter from the debtor, it makes them more likely to put the account on the back burner and move on to easier targets.

If they do end up suing you, and you can prove that you sent them this letter with this demand, it makes your case that much stronger when you then make a motion to arbitrate with the AAA or JAMS, and many times the collector will simply dismiss the case or offer to settle rather than go into arbitration.

[bellessima]

Okay in the papers I was served, I received a Certificate of Compulsory Arbitration A one page doc that says;

"The undersigned certifies that the largest award sought by the complaintant, including punitive damages, but excluding interest, attorney's fees, and costs does not exceed limits set by Local Rules for compulsory arbitration. This case is subject to the Uniform Rules of Procedure for Arbitration."

Okay fine, so I went to WestLaw and here is what it has when I pulled up the Uniform Rules of Procedure for Arbitration in AZ....

UNIFORM RULES OF PROCEDURE FOR ARBITRATION [ABROGATED]
©2007 Thomson/West

AZ ST UNIF ARB References and Annotations
Rules 1 to 7. Repealed Oct. 10, 2000, effective Dec. 1, 2000
R. 1. Repealed Oct. 10, 2000, effective Dec. 1, 2000
R. 2. Repealed Oct. 10, 2000, effective Dec. 1, 2000
R. 3. Repealed Oct. 10, 2000, effective Dec. 1, 2000
R. 4. Repealed Oct. 10, 2000, effective Dec. 1, 2000
R. 5. Repealed Oct. 10, 2000, effective Dec. 1, 2000
R. 6. Repealed Oct. 10, 2000, effective Dec. 1, 2000
R. 7. Repealed Oct. 10, 2000, effective Dec. 1, 2000
END OF DOCUMENT
Copr. © 2007


Sooooooooo... what does this mean to me??

[treehugger1]

Sounds as if you have a court-ordered system of mandatory or compulsory arbitration. This is different than original contract arbitration. Research your state and local rules of civil procedure to determine how court-ordered arbitration affects you.

[GoingDown]

Yes, this is court-ordered mandatory [public] arbitration and will not help you at all.

You will have to file a written answer to the lawsuit denying everything before time runs out on it and file a motion to compel private arbitration through J.A.M.S. citing your credit card agreement.



J.A.M.S. http://www.jamsadr.com/

[bornfree2]

The last post on this was from 2011. Does anyone know if arbitration win-by-attrition is a working strategy? Have all the CC wised up on this?

[flashoflight]

Yes it's still a somewhat working strategy. Check out credit infocenter forums. I found it way too time consuming to go this route with a day job which made resolving this debt (and every other debt at the same time) via chapter 13 much more appealing. I was also sued by multiple creditors, so I wasn't going to do this for everybody. My most aggressive creditors were big banks that kept their debts, so this was not going to work out.

[bornfree2]

My most aggressive creditors were big banks that kept their debts, so this was not going to work out.

What was your experience with this? Is it a complex process that drags out? Expensive for the debtor defendant?

[flashoflight]

What was your experience with this? Is it a complex process that drags out? Expensive for the debtor defendant?

In my county, it was taking around 12 months to get to trial without arbitration. That was all the delay I needed to file BK. My most aggressive lawsuit opponents were Amex and Discover as original creditors, so they had deep pockets and wouldn't necessarily be dissuaded to go all the way. I was not going to resolve my huge debt problem with court trials or arbitration. Just delay long enough to file chapter 13.