Originally from:

Journal of American Arbitration (JAA) - Vol. 2, No. 1

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ARTICLES

Mitchell v. American Fair Credit Ass’n: Consumers Must
Have Notice of Arbitration Provisions in a New Contract for It
to Be Enforceable
By Marla Owczarek

I. OVERVIEW
Dadra Mitchell filed a class action against American Fair Credit
Association, Inc. (AFCA) in July 1997; in her complaint, Ms. Mitchell
asserted several causes of action, including one for violation of the
California Credit Services Act of 1984 (CSA),1 and sought injunctive
relief, compensatory damages, restitution and attorney fees.2 The
California Legislature enacted the CSA in response to concerns about
credit services organizations who offered to improve the credit standing
of consumers by providing them with education materials and, in this
case, an unsecured credit card.3 The CSA attempted to furnish
consumers with the information necessary to determine whether to
purchase the services of such an organization.4 The CSA instructs credit
services organizations to make certain disclosures and requires that
“every credit services contract be in writing and signed by the buyer.”5 In
January 1998, AFCA changed its membership rules to obligate new
members to sign a separate arbitration agreement, which required