A recent wrongful termination complaint filed by Deanna Richert, a former manager at National Arbitration Forum (NAF), claims she was denied promotions and terminated last year because of her gender and age, which were, respectively, female and over 40. NAF is a for-profit company based in Minneapolis which specializes in resolving claims by banks, credit card companies, and major retailers that contend consumers owe them money.

OK – wrongful termination suits happens every day, what makes this particular suit standout? Within the complaint Richert gives some amazing descriptions of deceptive and fraudulent practices on the part of NAF. This includes giving preferential treatment to favorite clients, described as “Famous Parties” by NAF, including:

• Instructing arbitrators to change decisions they had issued that were adverse to the Famous Parties (FP);
• Ensuring that arbitrators who had ruled against the FPs did not get more cases;
• Drafting claim forms for the FPs.
• Drafting fictitious affidavits of service (legal notices to consumers that they were being placed into arbitration). If a consumer is not notified, they cannot respond to arbitration. Not responding to arbitration means that NAF wins in arbitration.
• NAF issued rulings (arbitration wins for NAF) against consumers without consulting with arbitrators. (The arbitrators are supposed to rule on the cases).
• NAF prevented arbitrators from receiving responses to arbitration by not forwarding consumer responses to arbitration notices to arbitrators assigned to the cases. Per NAF arbitration procedures, if a consumer does not answer, NAF automatically wins arbitration.

To view the complaint, go here. Of course, NAF responded with an answer to the suit denying all wrong doing.

So who are these “Famous Parties”? In our readers’ experiences with NAF, most of the Plaintiffs in their arbitration disputes involved the infamous collection agency Mann Bracken and credit card company MBNA (now Bank of America).

NAF has been the subject of scrutiny before. Some lawmakers, in debating bills that would ban mandatory pre-dispute binding arbitration clauses in credit card agreements and other contracts, have accused the National Arbitration Forum of being biased in favor of businesses and against consumers. In June 2008, Business Week did an exposé on the firm, and concluded:

In California, the one state where arbitration results are made public, creditors win 99.8% of the time in NAF cases that are decided by arbitrators on the merits, according to a lawsuit filed by the San Francisco city attorney against NAF.

So why did Richert expose the business practices of NAF in her employment suit? In the complaint Richert seeks, among other things, the court to allow her to take this court rather than arbitration, since her employment contract with NAF contained – you guessed it – a mandatory pre-dispute binding arbitration clause.

Related posts:

1. Minnesota Attorney General Sues National Arbitration Forum In what looks to be a landmark win for consumers,...
2. J.P. Morgan Chase Halts Submitting Disputes to Arbitration On July 22, we reporting a lawsuit by the Minnesota...
3. FTC Report Recommends Changes to Fair Debt Collection Practices Act On February 26, 2009 the FTC released a recommendation to...
4. Shopping for a Consumer Attorney if You Are Sued by a Creditor Credit card companies and junk debt buyers have turned to...
5. Florida State Attorney General Files Suit Against Debt Settlement Firms Florida State Attorney General Bill McCollum recently filed two lawsuits...