Thinking About Arbitrating Your Credit Card Dispute? California Results Show The Odds Are Against You!

Jay Fleischman, in his article on the Bankruptcy Law Network entitled:  “Report:  Arbitration Stacks The Deck Against Consumers”, discusses the findings of a Public Citizens study which found that Arbitration proceedings, allegedly designed to resolve credit card debt disputes, favor the credit card industry.

In a follow up article by Brett Weiss on this site, Brett notes that Public Citizens had no hard data to support its conclusions and had to rely largely upon reports from former arbitrators for its findings because arbitrations are generally held in private and no results are published.

Well the results are in!

Business Week, in its article “Banks v. Consumers” confirms that the deck is truly stacked against the consumer, with odds that Vegas would love to have:  Credit Card companies win arbitration disputes 99.8% of the time.

That’s right!  99.8 % of the time.  In a study based upon arbitration of credit card disputes in California, the Consumer only won .2% of the time.

And the data appears to be irrefutable since California, unlike the other 49 states, requires the results of arbitration proceedings be publically  reported.

The article also exposes the National Arbitration Forum (NAF), an arbitration group that holds itself out as an unbiased forum to resolve credit card disputes without litigation, when in fact it markets itself to the credit card industry.

Business Week reports that internal NAF documents and interviews reveal that NAF sells itself to lenders as an effective tool for collecting debts.

As an example of the biases of NAF, the article cites to a September, 2007, NAF PowerPoint presentation aimed at creditors and labeled “confidential” that promised “marked increase in recovery rates over existing collection methods.”

The Business Week article is worth reading.

Another thing worth doing is to take the time to consult with an attorney with experience with consumer credit issues before agreeing to arbitrate any dispute with a credit card company.