Following the Supreme Court’s ruling last year in AT&T Mobility LLC v. Concepcion,1 which held that the Federal Arbitration Act (FAA)2 preempted a state law essentially conditioning enforcement of an arbitration agreement on its providing for class-wide arbitral proceedings, the Court’s Jan. 10, 2012, decision in CompuCredit Corp. v. Greenwood3 reaffirms the enforceability of mandatory arbitration clauses even where the underlying statute refers to the “right to sue” and “class actions.” The case addressed the federal Credit Repair Organizations Act (CROA),4 which regulates the practices of “credit repair organizations” (CRO), companies that offer services for the purpose of improving a consumer’s credit record.
The CROA requires these companies to provide certain disclosures to consumers before any contract with a consumer may be executed. The required disclosures include a statement to consumers that reads, “You have a right to sue a credit repair organization that violates the Credit Repair Organizations Act.” The CROA also provides that waiver of any consumer rights under the statute would be void and unenforceable and in its remedies provision expressly uses the terms “action,” “class action,” and “court.”
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