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The Supreme Court found that the Credit Repair Organizations Act does not preclude enforcement of an arbitration agreement in a lawsuit alleging violations of the Act. CompuCredit marketed a credit card to consumers to assist them in rebuilding their credit. Consumers sued alleging that the many undisclosed fees associated with opening the card greatly reduced the advertised credit limit, thereby reducing their opportunity to use the card to rebuild their credit. The credit card agreement contained an arbitration clause which CompuCredit sought to enforce. The trial court and the Ninth Circuit Court of Appeals denied the motion to compel arbitration. Credit repair organizations are required by the Act to inform consumers of their rights under the Act. Specifically, the notice to consumers is required to include the disclosure that consumers have the "right to sue" for a violation of the Act. The Court held that, as 15 USC 1679g(a), which gives consumers the right to enforce the supplier's liability for failure to comply with the Act, is silent on whether claims under the Act can proceed in an arbitration forum, the Federal Arbitration Act requires that the arbitration clause be enforced according to its terms.
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| © 2009 Ohio Attorney General Richard Cordray