The Record: National Arbitration Forum and Consumer Debt Arbitration

This Record supports the Unchecked article "The Private Debt Court That Lost Its License to Be Believed." It collects the public-source spine behind the article and separates documented facts, allegations, and procedural posture.

1. Minnesota Attorney General action against the National Arbitration Forum, July 2009.

   • Public reporting and later federal court summaries state that Minnesota Attorney General Lori Swanson sued NAF on July 14, 2009, alleging consumer fraud, deceptive trade practices, and false advertising.
   • The case settled less than a week later, with NAF agreeing to stop performing consumer arbitrations.

2. In re National Arbitration Forum Trade Practices Litigation, 704 F. Supp. 2d 832 (D. Minn. 2010).

   • Federal court order dated February 22, 2010.
   • The court summarized allegations about NAF, Accretive, Agora, Axiant, and Mann Bracken.
   • The order describes plaintiffs as consumers whose debts had been submitted to binding arbitration.
   • The order states that the amended complaint described NAF as the largest provider of consumer debt arbitrations in the United States.
   • The order states that, according to plaintiffs, law firms that later merged into Mann Bracken filed 60 percent of the 214,000 arbitration claims processed by NAF in 2006.

3. In re National Arbitration Forum Trade Practices Litigation, April 12, 2010 order.

   • The court denied motions to stay.
   • The court summarized plaintiffs' allegation that defendants operated a scheme to deprive consumers of fair arbitrations.
   • The court rejected threshold efforts to halt the case pending appeal.
   • The court stated that if discovery bore out the alleged biased and corrupt conduct, NAF's actions could not fairly be described as within the scope of the arbitral process for arbitral immunity purposes.

4. In re National Arbitration Forum Trade Practices Litigation, April 28, 2011 preliminary settlement approval order.

   • The court granted preliminary approval of a settlement.
   • The order recited proposed factual findings about NAF, Accretive, Mann Bracken, Axiant, Agora, Dispute Management Services, and the Agora funds' 40 percent interest in DMS.
   • The settlement order referenced a $3.2 million escrow account for settlement administration.

5. Public Citizen, The Arbitration Trap: How Credit Card Companies Ensnare Consumers, September 27, 2007.

   • Advocacy report based on California arbitration data.
   • The report stated that arbitration firms and credit card companies had a mutually beneficial relationship at consumers' expense.
   • Public Citizen's release said the report used California data to show unfair, secret proceedings where for-profit arbitrators made the rules.

6. Fair Arbitration Now summary of Public Citizen data.

   • The summary says Public Citizen analyzed nearly 34,000 NAF arbitration cases from 2003 to 2007.
   • It reports creditor wins in 93.9 percent of cases in which an arbitrator was appointed.
   • It reports that more than 80 percent of decisions were based only on business-party documents.
   • It reports a 99.99 percent business win rate in documents-only cases and a 1.4 percent consumer win rate in cases with hearings.

7. Cornell Legal Information Institute, Wex entry on arbitration.

   • The entry explains arbitration as a method for hearing disputes out of court.
   • It states that under the Federal Arbitration Act, arbitration decisions are binding like court cases and pursuing arbitration precludes raising the same claim in traditional court.
   • It notes controversy over mandatory arbitration clauses in contracts of adhesion.