Lawsuits being filed

Debt collection attorneys say that consumers may have recourse against the NAF, Mann Bracken, Bank of America, JP Morgan Chase, Citigroup, Discover Card, American Express and others. However, the scope of the issue is monumental and much still needs to be determined. The NAF typically arbitrated 200,000 claims per year and has been accused of engaging in consumer fraud, deceptive trade practices, false advertising and secret affiliations with debt collector Mann Bracken since at least 2007. A quick tally puts the number of consumers affected by possible fraudulent activity at nearly 500,000.

While issues of applicable law and statutes of limitation still need to be flushed out, lawsuits are currently being filed against some or all of these companies seeking damages for breach of contract, tortious interference, consumer fraud, antitrust conspiracy and other claims.

Since the NAF did not admit any wrongdoing in its consent decree with the Minnesota Attorney General, it will likely be the consumer's responsibility to prove fraud. But, how difficult will that be? Perhaps not as difficult as you might think...

Study shows NAF rubber stamped claims in favor of credit card companies

California debt collection lawyer Steve Recordon, says that collection attorneys have known about NAF's practices for a long time. He pointed to a 2007 study on the companies practices which tallied an NAF arbitrator's rulings in one day – the results of which were shocking. Recordon said:

According that study, an NAF arbitrator ruled on 40 cases in one day – all for the full amount that the credit card company sought. All were Chase Manhattan Bank. So, they're obviously just rubber stamping these cases in the credit card company's favor. Since credit card companies pay the arbitration company's fees, the likelihood of abusive practices is high.

What can you do now?

Consumers who dealt with the NAF are understandably irked and want to know what they can do now to find out if their arbitration ruling was fair. At this point, contacting a debt collection attorney to discuss your situation is probably your best bet as the facts and circumstances of each case are unique and additional information about the scandal is still being discovered.