How about THIS rigged? Some quotes--with comment--from the document:
First, is arbitration only forced on the actual party to the contract? No bloody way...
...Consumers are railroaded into arbitration even if their identity was stolen or they never agreed to take disputes to arbitration. [In all too many cases]the National Arbitration Forum, which routinely handles MBNA’s “collection” arbitrations, ignored repeated consumer protests that identity theft was the source of the alleged debt.
Note that NAF acts as the "enforcer" for MBNA here. They almost always are the arbitration forum for the credit industry; they are the biggest of them all.
How big? This 2003 report from the State of California shows just how big they are, and the volume of work they get:
...[T]he state of California in 2003...[required] arbitration providers to furnish some limited data [on their websites]...on each consumer arbitration case they handle. Even this information is obscured by the arbitration firms....
For the first time, we have comprehensively crunched data for the nearly 34,000 cases contained in NAF’s California reports...:
...With more than 1,600 part-time arbitrators on its national roster, NAF admits to handling more than 50,000 cases a year.2 In California alone, NAF handled 34,000 consumer arbitrations between Jan. 1, 2003, and March 31, 2007.
... NAF identified virtually all of its California cases as “collection” cases filed against consumers by credit card companies or firms that buy debts... Fifty-three percent of those cases involved MBNA credit card holders.
Note the sheer numbers: 50,000 cases A YEAR.
1,600 part-time arbitrators help handle the load...of collection accounts. That's right: NAF is, by their own admission, little more than a CA for the credit card companies and JDBs (junk debt buyers)!
• Corporations – not Consumers – Choose Binding Mandatory Arbitration: ...[C]onsumers chose to bring only 118 cases before NAF while corporations chose this business friendly forum nearly 34,000 times – 99.6 percent...
...In the more than 19,000 cases in which an NAF-appointed arbitrator was involved, 94.7 percent of decisions were for business.
Not only are the credit card companies the major--indeed, just about the only--players in the BMA (binding mandatory arbitration) game, but they win in almost 95% of the cases! No civil court is so biased in favor of plaintiffs as the arbitrators are to creditor claimants.
...Arbitrators have a strong financial incentive to rule in favor of the companies that file...because they can make hundreds of thousands of dollars.... The arbitrators are chosen by the arbitration firms ... Arbitrators routinely charge $400 or more an hour. Top arbitrators can charge up to $10,000 per day and some make $1 million a year....
Note the financial rewards for the busiest arbitrators. Guess why they are so busy:
...In California... 28 arbitrators handled nearly 9 out of every 10 NAF cases. This group ruled for businesses 95 percent of the time. Another 120 arbitrators handled slightly more than 10 percent...They ruled for businesses 86 percent of the time and for consumers 10 percent. Outside of California, there is no information that would allow consumers to even begin to assess the bias of an arbitrator.
The arbitrators who find for the "repeat customers"--the credit industry--make out like bandits...and the ones who might actually think "arbitration" should equal justice?...
...Companies track how arbitrators rule, and do not choose arbitrators who do not rule in their favor. One NAF arbitrator, a Harvard law professor, was blackballed after she awarded $48,000 to a consumer in a case in which a credit card company filed a claim against the consumer....[After she was removed from other cases] she resigned, citing NAF’s “apparent systematic bias in favor of the financial services industry.”
Never mind that the record is nearly always "sealed":
...NAF is so keen to hide its work from the public and limit information about its decisions that its arbitrators do not generally issue a written decision unless one of the parties specifically requests and pays for it in advance. ...
...NAF also limits the access of parties in arbitration to key information that they would be allowed to obtain in court. And the sad state of the law makes it nearly impossible for consumers to appeal adverse decisions by arbitrators.
In other words, "discovery" is a dirty word at the arbitration firms; any allowable discovery is limited or nonexistent. Also true, not mentioned here, is that the expense of arbitration is placed on both the credit card companies AND the consumer who is dragooned into the process unwillingly--even if they simply default (the costs are added to the award...and they can add up to thousands of dollars easily. Contrast filing fees in a court of law, which can be less than $100.00 for a small claim, and a few hundred dollars at best (for an appeal or a filing to Federal Court).
Despite claims by the arbitration industry, the practice of BMA is NOT what the Federal Arbitration Act , originally codified during the 1920's, was intended to be used for. Used properly--all parties agreeing to arbitration voluntarily at the time a dispute arises to resolve the dispute without going to court--arbitration is not a bad thing. However, BMA clauses are set up at the outset, long before any dispute can arise, and they are written in "boilerplate" which is slanted toward the credit issuer/service provider! The consumer has little choice but to accept the clause; alternative providers of the good or service may not exist.
Even more insidious is the addition of such arbitration clauses to contracts in the form of addendums or codicils. These almost always take the form of a "bill stuffer". In microscopic print. In language that even a contract lawyer finds nearly impossible to decipher! This is done deliberately in the hopes the consumer will ignore the tiny piece of paper...or even throw it out and forget about it. Forgetting about such a "bill stuffer" can be disastrous: The only way to get out from the automatic imposition of the clause is to "opt out" by closing the account, either entirely or to new transactions after the deadline for refusal. A deadline that can be as short as 30 days! (And almost always is.) If the customer fails to respond? The clause is accepted by implication and becomes binding on them.
And, as the Public Citizen document states, arbitration is really not intended to solve disputes but to keep collection costs to a minimum and bypass the costs and delays of going to court to collect on alleged debts! These "Collection Agencies from Hell"--as all CAs--don't care one little iota whether the respondent (the "defendant" debtor) really IS the actual party to the contract from which payment is sought...and ID Theft victims are not the only ones that get screwed this way...anyone could be hung with an arbitration award--and the resulting judgment--simply because someone was a lazy (or lousy) "skip-tracer".
The FDCPA does not consider arbitration firms to be collection agencies...so no protection there.
If one was not served properly if at all? Too bad: There is no reliable way to vacate an arbitration award because of "sewer service". Neither is one likely to be able to stop the process once it starts, since almost all arbitration cases filed by creditors/JDBs will, like a Broadway show, go "on" no matter what. Even if the consumer objects on a timely basis and in a fashion provided for in the Rules of Procedure for the arbitration firm involved; NAF is notorious for this.
And, once that award is issued to the creditor? The hapless consumer may not even be able to stop the award from becoming a judgment!
However, sometimes even the creditor is right! In a recent Tennessee case--"Amsouth Bank v. Soltis"--the TN Appeals Court upheld a lower court decision which Amsouth won against the Soltises (Amsouth got a motion for summary judgment against the Soltises).
In this case--which has strong parallels with the tactics used by NAF and others--the
bank (in this case rightfully) refused arbitration they had not agreed to. In turn, the Soltises were not only evading their debts, but were actually attempting to make the bank pay THEM for "debts" allegededly owed the Soltises and due them but which the bank never incurred!
ERRATA and CORRECTION: I have changed the last paragraph. I misread the case at first, since the time line is confusing, and saw it as a case in which a consumer had refused arbitration but was put through the wringer anyway. In this case, the creditor was the victim of such an attempt by a consumer.
My bad!
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