Preliminary Injunction in Herrera’s Arbitration Case Halts Publicizing of Private Information

City Attorney Wins Court Order Against FIA to Immediately Cease Disclosing Consumers’ Confidential Information

SAN FRANCISCO (April 16, 2008)-San Francisco Superior Court Judge Peter J. Busch granted a preliminary injunction to compel FIA Card Services, a leading credit card company, to immediately cease disclosing consumers’ confidential information in public court filings before superior courts throughout the state of California. Today’s preliminary injunction was granted in the case filed by City Attorney Dennis Herrera last month against National Arbitration Forum, Inc., FIA Card Services and Columbia Credit Services for engaging in a myriad of unfair and unlawful business practices that egregiously favor lenders in arbitration proceedings. In today’s hearing the City argued that FIA’s practice of neglecting to redact private information from public documents, including Social Security numbers, puts consumers at serious risk of identity theft. In addition to breaching a number of California State privacy laws, the City argued that this unfair business practice went against FIA’s own promise to consumers to keep personal information private. The Court found that that FIA has repeatedly violated the laws, in too many instances to count. FIA’s widespread violations must now cease.

“We are gratified that Judge Busch agreed with our position that FIA is illegally placing these individuals at a huge risk for becoming victims of identity theft,” said City Attorney Dennis Herrera. “FIA’s publicizing personal information is an unlawful business practice and I find it appalling that an entity that purports to protect consumer privacy would be so cavalier about disclosing its own customers’ very personal and private financial information and instead knowingly place their customers at risk of identity theft.”

In a lawsuit filed last month, Herrera alleges that NAF, a leading provider of arbitrators, illegally favors lenders in proceedings that are intended to resolve disputes over consumers’ debt privately and outside of the courtroom. The suit alleges that NAF engages in a myriad of unethical practices in order to find against consumers in arbitration proceedings, including failing to require debt collectors to prove that the consumer has been made aware of the arbitration, failing to honor consumers’ requests for hearings, and ignoring consumers’ submissions of evidence or arguments throughout the arbitration process. Additionally, the suit alleges that NAF further breaches ethical laws by unlawfully allowing inflated awards in favor of lenders that include inappropriate attorneys’ fees among other arbitration costs and fees that they cannot legally shift to the consumer under California law and using attorneys who are not licensed in California to conduct California arbitrations. Herrera’s suit also charges FIA, a Delaware bank that issues credit cards, and Columbia, a California debt collector, for corroborating with NAF’s nefarious schemes by forcing consumers into dispute resolutions that they know will result in their favor.

The City Attorney’s case is The People of the State of California, acting by and through San Francisco City Attorney Dennis J. Herrera vs. National Arbitration Forum, Inc.; FIA Card Services, N.A.; Columbia Credit Services, Inc.; Does 1-50 inclusive. San Francisco Superior Court, filed March 24, 2008.