June 12, 2008 11:44 AM

How about this for a perversion of justice? (guest post)

A recent expose in BusinessWeek sheds some chilling light on mandatory arbitration scams set up by credit card companies to deliberately, in their own words, "squeeze small sums of money out of desperately poor people." The piece details the functioning of the National Arbitration Forum, an extension of the collections industry hired to resolve disputes between consumers and corporate behemoths like Sears, Bank of America, and Citigroup.

How does it work?

You sign a form that has some fine print mandating that you wave your rights to resolve disputes in an independent court of law and instead agree to have disputes resolved by an "independent" third-party arbitrator selected by and paid for by the corporation with whom you have your dispute. A problem comes up. You get a string of baffling, jargon-laden letters in the mail. Next thing you know: presto! Your dispute has been "resolved." 98.8% of the time you lose. 93.7% of the time you don't even get to show up at a hearing.

Wow. What a great system. Why haven't we figured out how to privatize more parts of the legal system yet? Oh wait a second, we have.

Thanks to my colleague Nathan for the link.