AAA gets out of consumer debt biz
On the heels of the National Arbitration Forum’s decision to stop arbitrating consumer debt-collection cases, the American Arbitration Association announced yesterday it too was getting out of the consumer debt business.
The NAF made the move after Minnesota Attorney General Lori Swanson sued the agency for concealing its ties to debt collection agencies and working on the side of creditors against the interest of consumers.
Swanson is expected to testify today at a House Oversight and Government Reform subcommittee hearing on the use of arbitration in debt collection.
The move by the two major arbitration firms leaves the consumer debt-collection system, which has come under fire, in more disarray The Wall Street Journal reports. AAA officials said they will stop conducting such arbitrations until new rules are established governing them.
