A reporter from The New York Times spent 20 minutes on the phone with Joann Needleman yesterday, conducting an interview for an article that was published today. The article claims the existence of a double-standard, where collectors and debt buyers can sue consumers, but consumers are forced into mandatory arbitration if they wish to take legal action of their own.
But if you read the article, Needleman’s name does not appear. In fact, the industry’s side of the debate is left to a single statement issued by an the general counsel for Encore Credit, one of the companies named in the article as a benefactor of this so-called double standard.
Today’s article is the latest in a series called “Beware The Fine Print,” which, according to the Times, examines “how clauses buried in tens of millions of contracts have deprived Americans of one of their most fundamental constitutional rights: their day in court.” The Times’s website generated 65 million unique visitors every month.
But as Needleman pointed out, and says she pointed out to the reporter who contacted her, Michael Corkery, there is no double standard.
“There is simply no evidence that consumers are being harmed by arbitration,” said Needleman in an interview this morning. “The New York Times is simply not interested in anything our industry has to say.”
Needleman, the consumer financial services practice leader with the law firm of Clark Hill, the former president of NARCA, and a member of the Consumer Financial Protection Bureau’s Consumer Advisory Board, pointed out that the influx of lawsuits is a direct byproduct of existing court rules and case law which makes it more onerous for collectors and creditors to contact consumers.
“Class-action lawsuits benefit attorneys, not consumers,” Needleman said. “Ask any representative plaintiff if they know what is going on with their case and they probably have no idea.”
Arbitration hearings offer consumers a more “comfortable” environment to raise their concerns and seek justice, Needleman said. Many courts are using arbitration more and more to help render decisions more swiftly.
In Philadelphia, Needleman noted, all cases where the damages being sought total less than $50,000 goes to non-binding arbitration. And the Supreme Court last week ruled that arbitration, rather than class-action lawsuits, is “the preferred method for resolving issues between companies and their customers,” according to the Los Angeles Times. It’s interesting to note that this article also only quotes representatives from the consumer side of the transaction.