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NAF pulls out of consumer credit card dispute marketAttorney General Lori Swanson sued the National Arbitration Forum of Minnesota on July 14, claiming the firm deceived consumers by concealing its ties to the debt collection industry. The suit said the NAF had violated state laws against consumer fraud, deceptive trade practices and false advertising. Companies such as the NAF are private companies brought in by a credit card issuer to handle disputes, such as when a customer with credit card debt is not repaying what they owe. Swanson claimed that because of the forum's links to the collection industry, it could not be impartial in such disputes. "This is a classic case of the little guy getting stepped on by fine print contracts," Swanson said after filing the suit. On July 19, the Minnesota attorney general's office said that it had reached a settlement with the NAF, stating that the company will cease its consumer credit arbitrations by the end of this week. Under the settlement, the NAF will stop accepting and participating in new arbitrations involving credit cards, consumer loans, telecommunications, utilities, healthcare and consumer leases. "I am very pleased with the settlement," Swanson commented, noting that the forum "worked alongside credit card companies to get them to put unfair arbitration clauses in the fine print of their contracts and to appoint the forum as the arbitrator." She said she will be testifying before Congress to ask them to ban the use of mandatory arbitration clauses in consumer contracts. These clauses remove consumers' ability to take disputes involving credit card debt and other such issues to court. Many consumers do not realize they have signed away this right, because the explanation is in the fine print of their contract.
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