It explores how credit card companies use the arbitration system to settle cardholder disputes.
Most cardholder agreements contain a "mandatory arbitration" clause, which basically means that you agree to use the arbitration process instead of going court in the event of a cardholder dispute.
If you don't recall seeing such language in your cardholder agreement, just pull it out and start searching - I bet it's there somewhere buried in all the legal-ese.
After reading the article, which cites several legal professionals with the inside scoop on the arbitration process, it becomes clear how the arbitration system is manipulated so that consumers lose and the credit card companies win.
Which, of course sucks.
An overwhelming number of credit card companies use the National Arbitration Forum (NAF) to arbitrate their cases, and the NAF uses tactics that favor the creditors and puts unsuspecting consumers at a huge disadvantage.
The article is a little lengthy but definitely worth the read. Especially if the arbitration clause in your credit card agreement says that you'll have to use NAF for arbitration!
According to the Federal Trade Commission, consumer complaints of violations of the Federal Debt Collection Practices Act (FDCPA) by third-party debt collection agencies rose 2.4% in 2007.
Are you surprised?
You shouldn't be.
There are still quite a few "bad" debt collection agencies out there that employ unlawful tactics to try to collect debts from consumers.
And unfortunately, there are still many consumers out there who are not fully aware of their consumer rights, and therefore, unable to even identify when their rights are being violated.
Imagine how many more complaints the FTC would receive if people actually knew they could officially complain about certain debt collection activities?
The #1 complaint received by the FTC was that collectors were trying to collect debts from consumers that they did not owe, an amount that was more than what the consumer owed, or a debt that was discharged in bankruptcy.
The #2 complaint was harassment - collectors calling consumers repeatedly or continuously, or using profane, obscene or abusive language.
Other complaints received included:
threatening consumers with dire consequences the collectors legally could not, or would not, initiate if the consumer failed to pay, such as garnish wages, sue, seize property, have the consumer put in jail, etc.
continuing to call the consumer's place of employment after being notified not to, or knowing that the employer does not allow such calls
improperly contacting and revealing the consumer's debt to third-parties, misrepresenting themselves to third-parties, using abusive and harassing communication tactics with third-parties, and even trying to collect from the third-party
failing to send required consumer notices, which should include, among other things, the amount of the debt, the name of the creditor the debt is owed to, and a statement that if, within 30 days of receiving the notice the consumer disputes the debt in writing, the collector will obtain verification of the debt and mail it to the consumer
failing to verify disputed debts by ignoring written requests, sending no verification, and continuing collection efforts
continuing to contact the consumer after receiving a "cease communication" notification
The FTC receives more complaints about the debt collection industry than any other single industry.
I was asked not too long ago the following question:
"Can an unpaid cell phone bill affect your credit?"
My answer: ABSOLUTELY!
When you don't pay your outstanding cell phone bill, you are in breach of the contract agreement you have with your cell phone provider. You agreed to pay them for the cell phone services they provided you, and when you don't pay, that causes a big problem.
So, your cell phone company will most certainly come after you for the outstanding balance owed on your cell phone account.
The first course of action your cell phone company will most likely take will be to restrict or terminate your cell phone service.
Secondly, they'll pursue collection efforts themselves, by calling you (perhaps on your home phone since they've probably already shut off your cell phone), sending you email notices, and sending you "final notice" bills and/or collection notices in the mail.
And lastly, if the cell phone company doesn't get an acceptable response from you, they will most likely wash their hands of the situation and outsource their collection efforts to a third-party collection agency, or turn your account over to their own internal collection agency/department.
When you have an outstanding cell phone bill and you don't pay it, your cell phone provider and/or the collection agency will, in most cases, report the delinquent account to the credit reporting agencies.
And that negative entry on your credit report(s) will have an adverse affect on your credit and credit scores. Something you DO NOT want!
So, if you have an outstanding cell phone bill out there, contact your cell phone provider, and see if you can work something out to get the situation resolved.
If there's already been negative reports made to your credit reports about the account, even go so far as to negotiate the removal of any negative entries made to your credit reports in exchange for the payment of the account.
Have you checked your credit reports lately? If not, you should do so ASAP! Obtain and thoroughly review your credit reports at the very minimum of once per year. Don't delay, get your credit reports FREE from