This appeal concerned the extent to which companies running “credit repair” and “debt management” scams can force vulnerable consumers into arbitration to avoid public scrutiny of their practices. Facing over $100,000 in credit card debt, Elizabeth Picard responded to an from Credit Solutions, Inc., offering debt settlement help. Credit Solutions advised Picard to stop paying her creditors and promised to pay down her debts if she gave them authorization to make direct withdrawals from her bank account. Over four months, Credit Solutions withdrew over $5,500 from her account and failed to pay any creditors. Picard’s creditors declared her in default and demanded immediate payment, forcing her into bankruptcy. Picard sued, among other things, for violations of the federal Credit Repair Organizations Act (CROA). Credit Solutions argued that CROA did not apply to it and moved to compel arbitration pursuant to the agreement Picard had signed with them.
We wrote an amicus brief to the Eleventh Circuit on behalf of Public Citizen, the National Consumer Law Center, National Association of Consumer Advocates, and U.S. Public Interest Research Group, arguing that CROA applied to Credit Solutions and that the Act precludes mandatory pre-dispute binding arbitration of claims under the Act. Unfortunately, the court concluded that the Act’s plain language—which forbids of waivers of rights and confers a “right to sue”—was not enough to keep the case out of forced arbitration.