• Ninth Circuit Affirms that Right to Sue under the Credit Repair Organization Act Cannot Be Waived By Arbitration Agreement
  • September 15, 2010 | Author: Ryan Langston
  • Law Firm: Strasburger & Price, LLP - Frisco Office
  • Defendant CompuCredit marketed a subprime credit card issued by Columbus Bank and Trust (“Columbus”) utilizing direct mail solicitations and the Internet. Promotional materials represented that the card could be used to rebuild credit and improve a consumer’s credit while specifying “no deposit required” and that consumers would immediately receive $300.00 in available credit. Once issued the credit card, consumers were charged a $29.00 finance charge, a monthly $6.50 account maintenance fee, and a $150.00 annual fee. These amounts were immediately assessed against the $300.00 credit limit before the consumer received the credit card. Plaintiffs brought this class action suit alleging several violations of the Credit Repair Organization Act (“CROA”). Defendants moved to compel arbitration of Plaintiffs’ claims based on arbitration language contained in documentation received and signed by Plaintiffs. Plaintiffs countered that the arbitration agreement was void under the CROA based on specific provisions in the CROA disallowing any waiver of a consumer’s right to sue in court for CROA violations. The trial court agreed and denied the Defendants’ motion to compel arbitration. The 9th Circuit affirmed.