Using Arbitration As A Credit Repair Strategy

  More Text:  Many are teaching the process of using Arbitration as a credit repair strategy and charging a huge fee. Can this work? Yes, but you should know that this is still somewhat of an unconventional approach to doing it yourself and should be considered carefully. NOTE: First, as a credit consultant, you have clients and have to be careful with this process because what sales information will you share with your clients to get them to purchase your services? “I will get deletions for you using Arbitration and consumer laws?” You should not promise deletions or make claims that you are not able to keep. The strategy is excellent ONLY if you know what you are doing and properly describe the services without acting as an Attorney or providing legal advice. You can provide legal information BUT NOT provide legal advice. We know that many are teaching this strategy, BUT be careful to implement this for your client without understanding implementations. What we are hearing from untrained individuals offering this strategy violates CROA laws and other laws. If this is not done properly and you attempt to handle this process for your client, the following could happen because you are possibly acting as an attorney. 1. Unauthorized Practice of Law (UPL)

• Definition: UPL occurs when an individual gives legal advice, represents someone in a legal matter, or performs other legal services without being licensed to practice law in that jurisdiction.
• Consequences: UPL can result in civil penalties, criminal charges, and monetary fines. The severity of these penalties varies by jurisdiction.

2. Misrepresentation

• False Representation: Claiming to be a lawyer or implying that one has legal expertise or qualifications when one does not is a form of fraud.
• Legal Action: Individuals misrepresented as lawyers can face charges of fraud, which may lead to criminal prosecution.

3. Negligence or Malpractice

• Unqualified Advice: Even if not formally charged with UPL, providing legal advice without the necessary legal background can lead to allegations of negligence or malpractice if the advice causes harm.

4. Violating Ethical Standards

• Ethical Breaches: Acting as a lawyer without a license can be seen as a breach of ethical standards, leading to reputational damage and potential legal consequences.

5. Civil Liabilities

• Damages to Clients: Individuals acting as lawyers without authorization can be held liable for damages incurred by those they have advised or represented.

6. Legal and Ethical Considerations

• Informing about Non-Lawyer Status: It's crucial to inform others if you are not a licensed attorney, especially when discussing matters that could be construed as legal advice.
• Legal Advice vs. Information: Providing general legal information is not the same as giving specific legal advice. The latter should be left to qualified, licensed professionals.

7. Seeking Legal Advice

• Professional Help: Individuals needing legal assistance should seek advice from a licensed attorney to ensure they receive accurate and legally sound guidance.

In summary, acting as a lawyer without proper authorization is a serious offense that can lead to legal action, including criminal charges, civil penalties, and financial liabilities. It is always advisable to seek legal assistance from a licensed professional and to clearly communicate one’s qualifications (or lack thereof) when discussing legal matters. Let’s go over the process: Arbitration is typically used to resolve disputes between two parties and is often included in financial agreements as an alternative to litigation. Here’s how it might play a role in a credit repair strategy: Understanding Arbitration in Credit Situations

1. Arbitration Clauses in Financial Agreements: Many credit agreements, especially with credit card companies and lenders, include an arbitration clause. This clause means that disputes will be settled by Arbitration rather than in court.
2. Disputing Inaccuracies on Credit Reports: If you find inaccuracies on your credit report that negatively impact your credit score and the credit reporting agency or creditor does not resolve these after you've disputed them through the normal channels, Arbitration might be a next step.

Steps to Use Arbitration in Credit Repair

1. Review Your Agreements: Check your credit agreements to see if they include an arbitration clause.  You can go here to see if your credit card company agreement is on file. https://www.consumerfinance.gov/credit-cards/agreements/
2. Attempt Standard Dispute First: Before resorting to Arbitration, use the standard dispute process provided by credit bureaus to challenge any inaccuracies on your credit report.
3. Document Your Disputes: Keep detailed records of your disputes, including correspondence and outcomes. If the dispute is not resolved to your satisfaction, these documents will be important in Arbitration.
4. Initiate Arbitration if Necessary: If disputes are not resolved through the standard process and your agreement includes an arbitration clause, you can initiate Arbitration. Draft a letter requesting Arbitration, clearly outlining the dispute and your previous attempts to resolve it.
5. Understand the Costs and Process: Be aware that Arbitration can involve costs, such as filing fees or even legal fees if you choose to hire an attorney. Research the arbitration process as dictated by your credit agreement or the chosen arbitration forum.

Considerations and Risks

1. Cost vs. Benefit Analysis: Arbitration can be costly and time-consuming. Assess whether the potential benefit to your credit score is worth the cost and effort.
2. Legal Advice: Consider consulting with a legal professional who specializes in credit law to guide you through the process and assess whether Arbitration is a viable strategy for your situation.
3. Binding Decisions: Decisions in Arbitration are typically final and binding, with very limited options for appeal.
4. No Guaranteed Success: There is no guarantee that Arbitration will result in a decision in your favor or lead to a significant improvement in your credit situation.
5. Impact on Relationships with Creditors: Consider the potential impact on your relationship with your creditors. Initiating Arbitration could affect future dealings with them.

Consumer Laws Regarding Arbitration?

The specific consumer law you'll be using to request Arbitration largely depends on the nature of your dispute and the jurisdiction in which you reside. However, there are several key areas of consumer law that commonly intersect with Arbitration:

1. Federal Arbitration Act (FAA): In the United States, the FAA provides the legal foundation for enforcing arbitration agreements and governs the arbitration process. It applies to most contracts that involve interstate commerce, including many consumer contracts.
2. State Arbitration Laws: Each state may have its own laws governing Arbitration. These laws often complement the FAA but can have specific provisions related to consumer arbitration.
3. Consumer Protection Laws: Various federal and state laws are designed to protect consumers in transactions. For example:
   • The Consumer Financial Protection Act offers guidelines and protections related to financial products and services.
   • The Fair Credit Reporting Act governs the accuracy and privacy of information in credit reports, with mechanisms for dispute resolution, which can include Arbitration.
4. Sector-Specific Laws: Some laws are specific to certain industries. For example:
   • Telecommunications Act: Governs disputes in telecommunications services.
   • Lemon Laws: Applicable to disputes regarding vehicles and consumer goods.
5. Contract-Specific Arbitration Clauses: Many consumer contracts (like credit card agreements, loan documents, or service agreements) include arbitration clauses. These clauses typically specify how disputes are to be resolved through Arbitration.
6. Class Action Fairness Act: In some cases, especially where a dispute could potentially be part of a class action lawsuit, this act may come into play regarding arbitration agreements.
7. Consumer Product Safety Laws: For disputes related to the safety and quality of consumer products.
8. Online and Technology-Related Laws: For disputes involving online transactions, digital products, or technology services, various laws and regulations might apply, including those related to digital contracts and e-commerce.

When you're preparing to request Arbitration, it's important to identify which laws apply to your specific situation. This can influence not only your legal rights and the arbitration process but also the likelihood of a favorable outcome. Given the complexity of consumer law and the legal nuances of Arbitration, consulting with a lawyer who specializes in consumer rights can provide valuable guidance and ensure that your request for Arbitration is properly grounded in the relevant legal framework. Requesting Arbitration under consumer law typically involves a few key steps. Arbitration is an alternative dispute resolution process where an impartial third party, the arbitrator, makes a decision to resolve a dispute outside of court. Here's a general guide on how to proceed:

1. Understand Your Arbitration Rights

• Review Contracts and Agreements: Many consumer contracts (like credit card agreements, loan documents, service contracts) include arbitration clauses. Review these documents to understand if Arbitration is a mandatory or optional process for resolving disputes. Again, You can go here to see if your credit card company agreement is on file. https://www.consumerfinance.gov/credit-cards/agreements/
• Consumer Protection Laws: Be aware of consumer protection laws in your jurisdiction that might influence the arbitration process.

2. Initiate Contact with the Other Party

• Attempt Resolution: Before initiating Arbitration, it's often advisable to try to resolve the dispute directly with the service provider or seller.
• Formal Complaint: If direct resolution isn’t possible, submit a formal complaint to the company, stating your issue and your desire to resolve it through Arbitration.

3. Send a Demand for Arbitration

• Demand Letter: If the issue isn't resolved, draft a 'Demand for Arbitration' letter. This letter should include:
  • Your name and contact information.
  • A clear description of the dispute.
  • The resolution you are seeking.
  • A statement indicating your desire to resolve the dispute through Arbitration.
• Refer to the Arbitration Clause: If applicable, reference the specific arbitration clause in your contract that supports your request.

4. Choose an Arbitration Provider

• Provider Specified in Contract: Sometimes the contract specifies a particular arbitration provider or service. If not, you will need to choose one.
• Research Providers: Common providers include the American Arbitration Association (AAA) and JAMS. Choose a provider with experience in consumer law issues.

5. File Arbitration Claim

• Claim Submission: Submit your claim according to the provider's rules. This will likely involve filling out a form and paying a filing fee.
• Provide Documentation: Include copies of any relevant contracts, correspondence, and evidence supporting your claim.

6. Prepare for Arbitration Process

• Understand the Procedure: Familiarize yourself with the arbitration process as outlined by your chosen provider. This may include submission of additional documents, timelines, and how the arbitration hearing will be conducted.
• Legal Advice: Consider consulting with a lawyer experienced in consumer law and Arbitration to guide you through the process and represent you during the Arbitration.

7. Arbitration Hearing

• Attend the Hearing: Participate in the arbitration hearing, where both parties will have the opportunity to present their case.
• Final Decision: The arbitrator will make a decision after the hearing, which is usually binding and enforceable in court.

8. Follow Up

• If the decision is in your favor, follow up with the company to ensure compliance. If the decision isn’t in your favor, understand that most arbitration decisions are final and cannot be appealed.

Additional Considerations

• Cost: Be aware of the costs involved in Arbitration, including filing fees and possibly attorney's fees.
• Arbitrator Selection: In some cases, you may have a say in selecting the arbitrator.
• Timeframe: Arbitration can be faster than court litigation, but timelines vary by case and provider.
• Confidentiality: Arbitration proceedings are typically private.

Remember, the specifics of how to request Arbitration can vary based on the contract involved and the laws in your jurisdiction. It's often beneficial to consult with a legal professional for guidance tailored to your specific situation. -------------------------------------------------------------------------------------------------------------------- Below is a template for a dispute letter requesting Arbitration. Remember to customize this letter with your specific details and situation. Ensure that you reference any relevant contract clauses and follow any specific procedures outlined in your agreement or the arbitration provider's guidelines. [Your Name] [Your Address] [City, State, Zip Code] [Email Address] [Phone Number]   [Date] [Company's Name] [Company's Address] [City, State, Zip Code] Attn: [Customer Service / Dispute Resolution Department] Dear Sir/Madam, Subject: Request for Arbitration Regarding Dispute with Account/Contract [Your Account or Contract Number] I am writing to formally dispute [describe the nature of your dispute in brief, e.g., billing errors, service issues, etc.] related to the above-mentioned account/contract. Despite my previous attempts to resolve this issue [mention any previous communication efforts, such as phone calls, emails, or letters], a satisfactory resolution has not been achieved. As per the terms of our agreement [if applicable, reference the specific clause in the contract that provides for Arbitration], I am hereby requesting Arbitration to resolve this matter. I believe that an impartial third party can facilitate a fair resolution. The main points of contention are as follows:

1. [List the key issues involved in the dispute. Be as specific as possible, mentioning dates, amounts, and any other relevant details.]
2. [Continue listing issues as needed.]

I have attached copies of relevant documents that support my position, including [list any attached documents such as previous correspondence, contracts, receipts, etc.]. I am prepared to follow the necessary procedures as outlined by an appropriate arbitration provider and am open to suggestions regarding the selection of such a provider. My intention is to resolve this dispute amicably and efficiently, and I believe that Arbitration is the best way to achieve this. Please respond to this letter by [give a reasonable deadline for response, e.g., 15-30 days] to confirm the receipt of this request and to provide further information on the next steps in the arbitration process. Thank you for your prompt attention to this matter. I look forward to resolving this issue in a fair and timely manner. Sincerely, [Your Signature (if sending a hard copy)] [Your Printed Name] Attachments: [List of documents attached] Before sending the letter, ensure that you keep a copy for your records. If you are sending any original documents, it's advisable to keep copies of those as well. Depending on the situation, you may also want to send this letter via certified mail to ensure it's received and to have a record of its receipt.

Arbitration Proceedings

Here’s a detailed overview of how arbitration proceedings typically unfold:

1. Agreement to Arbitrate

• Begins with an arbitration clause in a contract or a separate arbitration agreement, where parties agree to resolve disputes through arbitration instead of court.

2. Initiation of Arbitration

• One party (the claimant) initiates the process by submitting a notice of arbitration to the opposing party (the respondent) and possibly to an arbitration institution, depending on the rules governing the arbitration.
• The notice typically includes a brief description of the dispute, the remedy sought, and sometimes the proposed arbitrator(s).

3. Selection of Arbitrator(s)

• Parties select an arbitrator or a panel of arbitrators. The selection process can be governed by rules in the arbitration agreement or by the rules of the arbitration institution.
• Arbitrators are usually experts in the subject matter of the dispute and are required to be neutral and unbiased.

4. Preliminary Hearing

• A preliminary meeting or hearing is held to establish the framework of the arbitration process.
• Issues discussed may include the scope of the dispute, procedural matters, timelines, discovery processes, and any special requirements.

5. Discovery Process

• Similar to litigation, there may be a discovery process, but it is usually more limited in scope and duration.
• Parties exchange relevant documents and may include depositions, though this is less common than in court proceedings.

6. Arbitration Hearings

• During the hearing, parties present their evidence and arguments. This can include witness testimony, expert reports, and documentary evidence.
• Hearings can be conducted in person, via video conference, or even based on documents alone, depending on the agreement and the complexity of the case.

7. Post-Hearing Submissions

• Parties may be allowed to submit additional documents or post-hearing briefs after the hearing, especially if new evidence or arguments have emerged.

8. The Arbitrator's Decision (Award)

• After the hearing and any post-hearing submissions, the arbitrator(s) deliberate and issue an arbitration award.
• The award includes the arbitrator’s decision on the dispute and may include details about compensation, actions to be taken by the parties, or other remedies.

9. Enforcement of the Award

• Arbitration awards are generally final and binding.
• They can be enforced through courts, similar to a court judgment, especially under international treaties like the New York Convention for international arbitrations.

10. Limited Right to Appeal

• There is very limited scope for appealing an arbitration award. Appeals can usually only be made on grounds like arbitrator misconduct, fraud, or a gross miscarriage of justice.

Advantages and Disadvantages

• Advantages: Faster resolution, reduced legal fees, confidentiality, and the expertise of arbitrators in the relevant field.
• Disadvantages: Limited discovery and appeal rights, potential for less rigorous legal examination, and binding decisions that may not favor one party.

Notice of Arbitration

Here's a template for a notice of arbitration letter. This template is basic and should be tailored to the specifics of your situation, including any details required by the arbitration agreement or the rules of the arbitration institution involved. Ensure that all relevant information is accurately included. [Your Name] [Your Address] [City, State, Zip Code] [Email Address] [Phone Number]   [Date] [Respondent's Name or Company's Name] [Respondent's Address or Company's Address] [City, State, Zip Code] Re: Notice of Arbitration Dear [Respondent's Name or Company's Name], Pursuant to the arbitration clause in our agreement dated [Insert Date of the Agreement], I am writing to inform you of my intent to initiate arbitration to resolve a dispute that has arisen under the terms of this agreement.

1. Description of Dispute: [Provide a clear and concise description of the nature of the dispute, including specific issues and how the other party has allegedly breached the agreement or caused a disagreement.]
2. Attempted Resolution: [Detail any attempts you have made to resolve this dispute prior to initiating arbitration, including dates and outcomes of these attempts.]
3. Desired Remedy: [Specify the remedy or resolution you are seeking through arbitration. This could include monetary compensation, specific performance, or any other remedy appropriate to the dispute.]
4. Proposed Arbitrator(s): [If applicable, include a proposal for who should serve as the arbitrator, or your preferences for the selection process, in accordance with the rules stipulated in the arbitration clause.]
5. Arbitration Proceedings: [Refer to the specific arbitration institution or rules that will govern the proceedings, if applicable.]
6. Contact Information: [Provide your contact information or that of your legal representative, if you have one, for further correspondence related to this arbitration.]

Please acknowledge receipt of this notice and inform me of your availability for a preliminary meeting to discuss the arrangements for the arbitration process. I am committed to resolving this dispute amicably and efficiently through arbitration and hope for your cooperation in this matter. Sincerely, [Your Signature (if sending a hard copy)] [Your Printed Name] Attachments: [List any relevant documents you are including, such as a copy of the contract containing the arbitration clause.]