Another arbitration provider heard matters in which it had a conflict

Remember how the National Arbitration Forum, also known as NAF, arbitrated disputes involving an affiliated debt collector? Well, the CFPB has banned another arbitration service provider, Ejudicate from consumer arbitrations for a variety of reasons, including that Ejudicate heard matters brought by a party with whom it had a financial relationship, Prehired Recruiting. The CFPB reported that Prehired had agreed with Ejudicate that Prehired would initiate at least 300 arbitrations with Ejudicate, and that Ejudicate would be paid a contingency fee for arbitrations that settled. Despite the Supreme Court’s conclusion that arbitration is a matter of consent, the consumers in the Prehired-Ejudicate arbitrations had not consented to the arbitrations. The press release is here. It’s concerning that arbitration providers get snared in corruption scandals. But the industry keeps claiming consumers do better in arbitration than in court.

Leave a Reply

Your email address will not be published. Required fields are marked *