Arbitration on credit card disputes called a “scam.”

Your credit card agreement probably contains an arbitration clause forcing you to take any disputes to arbitration before going to court. It sounds like a good idea, but as CNN reports consumers lose almost 100% of the time: 99.9%-plus. The credit card companies select, hire and pay the arbitrator, usually a company called the “National Arbitration Forum.”  (NAF). The information given to the arbitrator is limited and the consumer is seldom represented. One expert has called it a “scam.”

As we have written elsewhere on this site, you have several options when dealing with credit card companies, depending on the problem.

If you have a problem with a charge you think is wrong, there is a federally mandated procedure for the company to resolve it that works pretty well.

If you have problem with a charge made by the company (like a late charge) the best thing to do is talk to a supervisor and if they do not give you satisfaction, threaten to change credit card companies. They do no like cancellations.

If you are having trouble making your payments, and you feel you want to pay them off, you can try talking to their “account retention” department, but you might be better off going to a local Consumer Credit Counseling office and creating a “Debt Management Plan (DMP).” They can usually get significant reductions in interest and late payment charges and arrange a monthly payment you can afford.

If Consumer Credit Counseling cannot work something out then you should talk to a bankruptcy attorney. Depending on your circumstances they can wipe out your credit card debt, or let you pay it off at 10-15 cents on the dollar.

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