My Favorite Business Resources
- Cheap Business Phone Service - Make phone calls anywhere for free or darn close to it.
- Cheap Printing - Always amazing deals on cheap printing with loads of free items.
- Manage Mobile Phone Costs - Great phone for controlling cell phone costs for business or teenagers.
- Really Good Web Hosting - As bullet proof as there is. A strong hosting provider with all the resources you need.

My Favorite Credit Resources
- Consolidate Your Debt - One monthly payment. Stop collection calls.
- Help Budgeting - Online and easy.
- Lower Your Car Payment - Refinance to reduce your monthly payment.
- Credit Report / Credit Score - This consolidated report is better than most.
- Credit Cards - Find the best card for you for low rates, balance transfer, credit rebuilding and rewards.

Jun

2008

The Absurdity of Creditor Arbitration

Posted by Steve Rhode as Debt Collection

If you're new here, you may want to subscribe to my RSS feed right now, before you forget, to get the latest posts. Thanks for visiting!

I just read a great article in BusinessWeek titled “Creditors Screw Consumers Again”, actually it was Banks vs. Consumers (Guess Who Wins).

It was the single best article that I’ve read in years regarding the farcical B.S. creditor arbitration clauses in credit card agreements. Ever since credit card arbitration became popular I have always questioned its impartiality and fairness. You see the arbitrators, for the most part, are paid for and essentially work for the creditors, so who do you think wins these cases?

One of the collection agencies mentioned in the article is HQ’ed in Rockville, Maryland. I remember having a client who was in arbitration with MBNA and I wanted to drop off supporting documents for the clients side of the case. You can imagine my surprise when I went to the arbitration address and it was in fact the office of this national collection company. Now there is some injustice for you.

As predicted, the arbitrator in the case ruled in the banks favor and never would respond to any request for an explanation about why that ruling was awarded.

Now arbitration can be a very valuable tool to allow two parties with different views to have their case reviewed by an impartial and independent third-party who can then provide a ruling based on the facts.

But in the case of creditor arbitration, the process has been so bastardized by creditors seeking total control and to strip consumers of real rights, that for me, it has given arbitration for money issues, a bad name.

I would suggest that if you think you may be facing difficult financial problems, that you write to each of your creditors and notify them that you are opting out of the arbitration portion of the cardholder agreement. Be sure to send the letter by some means that provides proof of delivery.

Because, when it comes to you as a consumer, having your dispute with your creditor, fairly and impartially reviewed by an arbitrator, dream on.

-----

If you enjoyed this post be sure to grab the RSS feed or get posts by email so you don't miss a bit of what's to come.

Steve