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Arbitrating with USAA

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Hi all -- I'm new and happy to be here. Having already arbitrated with a P-to-P lender via JAMS and received a deletion and cash settlement, I am now ready to take on USAA. The issues are procedural (failure to report account as disputed to CRAs during lengthy direct dispute process) as well as substantive (duplicate account reporting for several months, inexplicably verified by EX and OC). 


My questions are these:


  1. When preparing the Demand for Arbitration for JAMS, is it best to include Experian as an additional defendant, or to arbitrate with them separately if necessary? I believe their TOS requires use of AAA.
  2. Does anyone have experience arbitrating with USAA? My inclination is that they will not settle as quickly as the P-to-P lender, who required some fight from me, but not all-out war. USAA seems like a different story.


Note: I know that USAA uses AAA as the arbitration forum for credit card accounts, but I have a USAA FSB agreement that references JAMS, and the result letters USAA sent me all specifically come from USAA FSB, not the credit card operation.

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You have to establish whether or not in your state Experian would be considered bound by the USAA arb agreement. Each state is different. If not, see if you have to subscribe to their site in order to be covered by the arb agreement. Awards for FCRA violations are not very large. The FCRA provides for statutory damages in the amount of $100 to $1,000, but plaintiffs must first prove a willful violation.

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Thanks for the response, very helpful. I’m in NJ. FCRA violatons don’t come with big payoffs, but our Consumer Fraud Act here has teeth and gives treble damages. I will check to see if NJ would bind Experian to the USAA arb. I am a subscriber to Experian services, and thus bound by their TOS.

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You have the wrong statute. The Consumer Fraud Act applies primarily to goods and services sold at retail. It also exempts professionals like lawyers.


There is a separate statute in NJ for credit reporting, which indicates that the legislature had no intent for the other statute to be used. It basically mirrors the federal FCRA and has the exact same penalties. Whether or not you  can collect on both is something a NJ lawyer would have to tell you. 


CHAPTER 172 AN ACT concerning consumer credit reports and supplementing Title 56 of the Revised Statutes. BE IT ENACTED by the Senate and General Assembly of the State of New Jersey: C.56:11-28 Short title. 1. This act shall be known and may be cited as the "New Jersey Fair Credit Reporting Act."


What you want to look at is whether or not a non-signatory to a contract can be held to arbitration in the 3rd circuit. You probably would do better arbitrating separately with these two entities.

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In terms of arbitrating separately against USAA and Experian, I agree 100%.


My longtime attorney passed away last year. He told me to invoke the NJ CFA in any consumer contract, including banks. His reasoning was that most out-of-state lawyers are unfamiliar with its provisions, and would be scared off by the specter of treble damages. 


I agree, though, that the intent of the law seems like it applies more to retailers than banks. And yes, "learned professionals" are definitely excluded (including insurance agents). 


As far as I know, the advantage of the NJFCRA is that cases cannot be removed to federal court if a consumer chooses to sue in Small Claims or Special Civil Part. I'm not sure, either, if NJFCRA and Federal FCRA claims cancel each other out. 


After reading your comment I wondered if there was something more to including the CFA in litigation against banks. I found out that state laws are generally applicable to federally chartered banks as long as they don't conflict with the National Banking Act; and that claims of unconscionability, lack of fair dealing and the like are common reasons to include the CFA in a complaint.


Of course, my goal is to reach settlement before they even see a complaint, because JAMS requires the bank to pay up front after receiving the Demand for Arbitration, but before the plaintiff serves the complaint. Only time will tell.

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I wouldn't use it because it doesn't really apply to credit reporting. You won't be able to find any case law for your complaint. As for treble damages, even if this statute did apply, you'd have to prove you have some. The statutory penalty is not damages. You have to prove an ascertainable loss of actual money.

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