New form of debt collection?
By Ruth Susswein Credit card companies and other firms are using binding, mandatory arbitration as a new way to collect on debts that they otherwise could not get at, according to a recent study by the consumer group Public Citizen. Public Citizen charges that consumers are “railroaded” into accepting arbitration as the only means to resolving a dispute. If you have a credit card, cell phone, cable TV contract, insurance, new car financing or even a mortgage, you’ve probably agreed to a fine print clause requiring all disputes to be settled in a private arbitration forum instead of in a court of law. With no choice, little discovery and very limited right to appeal, the study concludes that binding mandatory arbitration is a system where the company holds all the cards. “Consumers have fewer tools to fight back through arbitration. There is no due process. Everything is secret and consumers must accept this forum with no right to go to court,” said Laura MacCleery, director of Congress
