Consumer Affairs

AT&T has amended its terms of service to preclude consumers from participating in class actions, whether handled via litigation or arbitration. The terms of service explicitly prohibit consumers from bringing class actions, even in an arbitration setting: “Any arbitration under this Agreement will take place on an individual basis; class arbitrations and class actions are not permitted.” The service agreement already precludes any litigation outside of small claims court. Bold-faced type proclaims that, “In the unlikely event that AT&T’s customer service department is unable to resolve a complaint you may have to your satisfaction (or if AT&T has not been able to resolve a ... Read Full Story

The National Arbitration Forum will stop administering consumer arbitration disputes as part of a settlement agreement with the Minnesota Attorney General. Forum, as the group is known, says it ”lacks the necessary resources to defend against increasing challenges to arbitration on all fronts.” In her lawsuit, Minnesota Attorney General Lori Swanson claimed the group, the largest arbitration company in the country for consumer credit disputes, misrepresented its independence and hid from consumers and the public its extensive ties to the collection industry. Swanson’s lawsuit alleges that the National Arbitration Forum, while holding itself out as impartial, works behind the scenes -- alongside creditors and ... Read Full Story

When handling consumer disputes, credit card companies have a critical tool for keeping down legal costs: The option to avoid court and go to arbitration. Unbeknownst to many consumers, card agreements typically include an arbitration clause that waives a card holder's right to sue. This gives banks the ability to use the clause defensively to protect against lawsuits, or offensively to go after debt collections. On Wednesday, a Congressional committee held a hearing on the Obama administration's proposal to ban arbitration clauses from credit card agreements as part of a wider push for consumer protections. The administration has already passed sweeping new regulations that ... Read Full Story

Arbitration clauses -- those mandating dispute resolutions other than litigation -- became quite common in consumer contracts in recent years, especially for credit cards and cell phones. The clauses are greatly advantageous for corporations, as they are spared the expense and hours needed to effectively defend against a consumer or class action lawsuit. Sometimes, however, corporations benefit in less obvious -- and more nefarious -- ways. A number of suspicions were reinforced this week when three separate class action lawsuits were filed against the National Arbitration Forum (NAF), one of the country's largest arbitration providers. The suits allege that NAF enjoys cozy relationships with ... Read Full Story

Attorney General Lori Swanson said Sunday that her office reached a sweeping legal settlement that requires a Minnesota company to get out of the business of arbitrating credit card debts and other consumer collection disputes nationwide. The agreement comes less than a week after Swanson sued the National Arbitration Forum over its handling of debt disputes between consumers and credit card companies. The lawsuit accused the St. Louis Park-based firm of violating state consumer fraud, deceptive trade practices and false advertising laws by hiding financial ties to collection agencies and credit card companies. "To consumers, the company said it was impartial, but behind the ... Read Full Story