On July 22, we reporting a lawsuit by the Minnesota Attorney General who sued the National Arbitration Forum (NAF). As result of the lawsuit, the firm essentially shut down for good. Now one of the big players in the credit card industry, JP Morgan Chase, has announced that they are halting the process of submitting disputes through arbitration firms.

Is this perhaps because the credit card industry has few if any choices on where to send arbitration disputes? Maybe there are not as many big arbitration firms left, but a brief search on Google reveals there are plenty of small law firms left who specialize in arbitration.

The problem is one law firm cannot handle the hundreds of thousands of arbitration disputes the way NAF and American Arbitration Association (AAA) churned out the rubber-stamped arbitration awards. Maybe Chase doesn’t want to be bothered with learning the system at many different firms – after all, each one is different. As the the text of Minnesota AG’s complaint revealed – NAF actually helped Chase considerably to grease the wheels so a case could move through the arbitration process quickly.

So what’s next? Will the other credit card companies follow suit? It’s just my personal opinion, but I think that’s going to be the case. And how will the credit card companies handle delinquent accounts in the future? There are alternatives to lawsuits and arbitration. It’s my hope that they will continue to work with struggling consumers:

• Lowering interest rates
• Waiving fees due to late pays or over the limit fees
• Reducing principal on credit card balances. (debt settlement)
• Removing arbitration clauses from consumer agreements. (Hey, they’ve modified consumer agreements to add on fees and interest rates – let’s move in positive ways towards the consumer for a change).

Breaking the news of Chase’s suspension of arbitration were our friends at creditcards.com.

Has any of you heard any other rumblings af arbitration suspension from your credit card companies like Bank of America, American Express or Wells Fargo? Tell us about it by leaving a comment!

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