With the start of the New Year, it's time for credit counseling agencies to think about ways to enhance legal and regulatory compliance. Here are some tips on topics that you may not know about.
1. Reduce the Threat of Class-Action Lawsuits
In a profoundly significant decision with far-reaching implications for counseling agencies, the U.S. Supreme Court in CompuCredit Corporation and Synovus Bank v. Greenwood, ruled that lawsuits brought under the federal Credit Repair Organizations Act can be subject to arbitration on January 10, 2012. In addition, the U.S. Supreme Court last year overturned an appellate court decision that held that an arbitration clause in a consumer agreement containing a class-action waiver was unconscionable, and therefore unenforceable as a matter of law.
Credit counseling agencies can use these two rulings to help eliminate the threat of consumer class actions by using carefully drafted contract language. While not bullet-proof, consumer-friendly arbitration provisions with class-action waivers can reduce the risk of class-action lawsuits (or put you in a better position to successfully defend them).
Please see full article below for more information.
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