AAJ Statement of JPMorgan Removing Forced Arbirtration Clauses from Credit Card Contracts

Today, JPMorgan Chase & Co., the biggest credit card lender, will remove clauses from its contracts that force consumers into arbitration. Numerous reports and studies have shown these forced arbitrations are largely stacked against consumers.

The following is a statement from American Association for Justice President Anthony Tarricone:

“JP Morgan’s decision is a win for consumers, who previously had no recourse because of rigged forced arbitration proceedings. Unfortunately, other lenders and corporations outside the financial sector still insist on forcing their employees or customers into one-sided arbitrations to escape accountability. Congress must act and pass the Arbitration Fairness Act to prohibit this abusive practice and give Americans a real opportunity to receive justice when facing corporate wrongdoers.”

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As the world's largest trial bar, the American Association for Justice (formerly known as the Association of Trial Lawyers of America) works to make sure people have a fair chance to receive justice through the legal system when they are injured by the negligence or misconduct of others--even when it means taking on the most powerful corporations. Visit http://www.justice.org.

NAF Settlement Underscores Need for Congress to Pass Arbitration Fairness Act

For Immediate Release: July 20, 2009
Contact: Kerri Axelrod
202-965-3500 x369
AAJ Press Room

NAF Settlement Underscores Need for Congress to Pass Arbitration Fairness Act

The following is a statement from American Association for Justice President Les Weisbrod regarding the settlement by the Minnesota Attorney General with the National Arbitration Forum:

“The appalling business practices of the National Arbitration Forum (NAF) illustrate how forced arbitration fails to protect consumers from predatory financial lenders and other negligent corporations.

“The NAF operated by creating an economic incentive to rule against consumers in favor of credit card companies and debt collectors; a far cry from the ‘fair’ and ‘unbiased’ forum they marketed.

“While the settlement with the attorney general is a major win for consumers, the NAF is not the only company that uses forced arbitration against consumers. This settlement underscores why Congress must pass legislation that makes arbitration voluntary, not forced upon consumers by slipping it into the fine print of everyday contracts.

“Attorneys have long used voluntary arbitration and mediation as an effective and efficient manner to resolve disputes. But when arbitration is forced upon consumers in a pre-dispute, non-negotiable contract, it becomes an abusive weapon.

“The NAF settlement should convince all skeptics that forced arbitration is biased, one-sided, and operates to accommodate predatory corporations at the expense of consumers. The time has come for Congress to ban forced arbitration once and for all.”

Two bills have been introduced in Congress to stem the abusive practice of forced arbitration. The bipartisan Arbitration Fairness Act (S. 931 / H.R. 1020), sponsored by Sen. Russ Feingold (D-Wis.) and Rep. Hank Johnson (D-Ga.), would ensure that the decision to arbitrate is made voluntarily and after a dispute has arisen, so corporations cannot manipulate the arbitration system in their favor at the expense of consumers and employees. The bipartisan Fairness in Nursing Home Arbitration Act (S. 512 / H.R. 1237), introduced by Sens. Mel Martinez (R-Fla.) and Herb Kohl (D-Wis.) and Rep. Linda Sanchez (D-Calif.), would eliminate forced arbitration clauses in nursing home contracts.

On Wednesday, a House Oversight and Government Reform subcommittee is scheduled to hold a hearing on the use of forced arbitration in consumer debt collections. Invited to testify is the Minnesota Attorney General and the COO of NAF.

Forced arbitration clauses are hidden in the fine print of everyday consumer contracts from job applications and nursing home agreements to credit card billing inserts and mortgage loans. To learn more, visit www.justice.org/forcedarbitration.

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As the world's largest trial bar, the American Association for Justice (formerly known as the Association of Trial Lawyers of America) works to make sure people have a fair chance to receive justice through the legal system when they are injured by the negligence or misconduct of others—even when it means taking on the most powerful corporations. Visit http://www.justice.org/newsroom.

Consumer Financial Protection Agency Bill is Right to Address Forced Arbitration, Says Coalition

For Immediate Release: July 14, 2009

CONTACT:
Angela Bradbery, Public Citizen
202-588-7741, abradbery@citizen.org
Kerri Axelrod, American Association for Justice
202-965-3500 x740, kerri.axelrod@justice.org


Consumer Financial Protection Agency Bill is Right to Address Forced Arbitration, Says Coalition

Today, the Senate Banking Committee will hear testimony on the proposed Consumer Financial Protection Agency. The following is a statement from David Arkush* of the Fair Arbitration Now Coalition regarding the House draft of the bill (H.R. 3126), sponsored by Rep. Barney Frank (D-Mass):

Washington, DC – “The new Consumer Financial Protection Agency should provide a critical check on the unscrupulous practices of the financial industry that have inflicted economic hardship on American families.

“We are encouraged that the House bill addresses forced arbitration. Ending this predatory practice in consumer financial contracts is critical to protecting consumers and restoring accountability in the financial marketplace.

“Forced arbitration clauses are hidden in the fine print of everyday consumer contracts from job applications and nursing home agreements to credit card billing inserts and mortgage loans. Corporations use these one-sided arbitration clauses as a shield to avoid accountability and a sword to hound consumers for debts they may not even owe.

“We look forward to working with members of Congress in the coming weeks to strengthen the House language and ensure that the legal rights of Americans are safeguarded against predatory financial corporations.”

The Fair Arbitration Now Coalition has over 70 members and supporters, representing consumers, employees, homeowners and franchise holders. The groups range from Public Citizen, the Leadership Conference on Civil Rights, the National Association of Consumer Advocates, the National Employment Lawyers Association and the American Association for Justice to Consumers Union and Consumer Federation of America.

Two other bills have been introduced that would stem the abusive practice of forced arbitration. The bipartisan Arbitration Fairness Act (S. 931 / H.R. 1020), sponsored by Sen. Russ Feingold (D-Wis.) and Rep. Hank Johnson (D-Ga.), would ensure that the decision to arbitrate is made voluntarily and after a dispute has arisen, so corporations cannot manipulate the arbitration system in their favor at the expense of consumers and employees. The bipartisan Fairness in Nursing Home Arbitration Act (S. 512 / H.R. 1237), introduced by Sens. Mel Martinez (R-Fla.) and Herb Kohl (D-Wis.) and Rep. Linda Sanchez (D-Calif.), would eliminate forced arbitration clauses in nursing home contracts.

* David Arkush is the Director of Public Citizen’s Congress Watch Division.

For more information, visit www.FairArbitrationNow.org.

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