Credit Card Companies Have Lost Their Arbitration Firms
As of Friday, July 24th, two of the country’s major national arbitration firms have stepped away from their role in resolving disputes between customers and their credit card companies. This action is being taken by the National Arbitration Forum and the American Arbitration Association after a Minnesota attorney general’s office sued the National Arbitration Forum last week over the way it handles disputes. The lawsuit contended that the Forum did not reveal its financial ties to the debt-collection industry constituting consumer fraud, deceptive trade practices and false advertising. The case was settled quickly on Sunday, July 19th, with NAF agreeing not to take any new consumer debt cases nationwide. AAA has announced it will no longer take consumer debt cases either until some standards and safeguards are established. Consumer advocacy groups think this may be the beginning of the end of forced arbitration in all consumer contracts from credit cards to cell phones.
Freddie Mac and Fannie Mae Required to Participate in Foreclosure Prevention and New Mortgages
This week Charles E. Haldeman, Jr. became the fourth CEO for Freddie Mac within the last twelve months. The government has agreed to pump up to another $200 billion into both Freddie Mac and Fannie Mae to keep them afloat to play the vital role in foreclosure prevention required of them by the US government. Providing a steady flow of cash to banks to make new mortgages is also required of the two government-backed mortgage companies. Freddie Mac is currently struggling with poor morale among its remaining 6,000 employees. Accounting scandals, loan losses, top management attrition and constantly changing parameters has gutted the spirit of the company’s workforce. Hadleman, Jr. is credited with boosting morale and regulatory compliance at Putnam at a time when the company was being investigated for mutual-fund trading abuses. The feds are now hoping he can do the same at Freddie Mac.
Fraud, Complicity and Theft Trials of Executives Continues
In the past week several more highly paid utives in positions involving fiduciary responsibility have pleaded guilty to theft in the millions from their employers. On July 21st Deborah Duffy, the former chief compliance officer of WG Trading Co., a broker-dealer company, plead guilty to securities fraud, conspiracy and money laundering up to $131 million in payments made to her bosses. She confesses knowing what was being done was illegal and has agreed to forfeit $1.27 million as well as pay restitution. Also on Tuesday, Richard Garaventa, Jr., a former vice president in the operations division of Morgan Stanley’s institutional securities business, pleaded guilty to grand larceny in the first degree and falsifying business records in the first degree. Over 7 years Garaventa, Jr. stole more the $2.5 million from the investment bank. Falsifying documents and payment processes were “a mistake and has accepted responsibility for his actions” per his lawyer. Banks are currently on a campaign to educate members about identity theft and fraud. Currently it appears that the greatest risk is from within the corner offices of the banks themselves.
Coastal Credit Solutions, Inc. operates a financial market place that matches Consumers and Businesses with debt eliminating and/or alternative financing service providers. If you have over $5,000 personal or business credit card debt or are seeking small business financing, please call us 866-205-8370 for a FREE no obligation consultation.
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