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Goodbye Mann Bracken. A Debt Collection Company Worth Going Bankrupt.

Boy, you talk about another corporate convoluted mess unraveling, this one is a doozy. To get the background you need to read Facts Reveled in National Arbitration Forum Lawsuit Should Make You Want to Puke.

In that piece you can learn more about the convoluted corporate games that were played to basically corrupt the credit card arbitration process into a joke. We all knew it was but hats off to Minnesota for doing all the research and connecting the dots of Accretive LLC , Axiant, Mann Bracken, Wolpoff and Abramson, National Arbitration Forum. Mann Bracken and Wolpoff and Abramson are collection companies.

Here’s a nice summary from a recent suit:

Most consumer credit card agreements contain mandatory arbitration clauses, which require consumers to forfeit rights to litigate their disputes in court and mandate that any disputes be resolved through an alternative system of binding arbitration. many of these agreement require disputes to be resolved exclusively through Defendant National Arbitration Forum (“NAF”). For years, NAF falsely held itself out as an independent provider of neutral arbitration services in consumer debt matters, unaffiliated with any person or entities within or outside the collection industry. Now, NAF is under siege by local and state prosecutors for working alongside creditors, rubber-stamping illegitimate arbitration awards against consumers, deceiving the courts and the public, and undermining the integrity of the arbitration system.

Defendant Mann Bracken, LLP (“Mann Bracken”) claims to be a law firm specializing in consumer debt collection matters, but it is a debt collector in its own right. mann Bracken initiated thousands of so-called “arbitrations” through NAF. Most of these arbitrations were against consumers from whom mann Bracken attempted to collect alleged credit card debts on behalf of its corporate clients, e.g., major credit card companies As a self-proclaimed “independent and impartial arbitration provider,” NAF was supposed to provide arbitration services devoid of conflicts of interest.

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In reality, NAF and Mann Bracken worked in tandem for the collections industry, their interests strictly aligned with credit card companies against consumers by virtue of their common owner, Defendant Accretive, LLC (“Accretive”). Accretive owns and controls both NAF and Mann Bracken and their related entities. NAF was thus far from an “independent and impartial arbitration provider.” and instead, was a sham operation whose primary purpose was to rubber=stamp arbitration awards and confer the appearance of legitimacy upon mann Bracken’s debt collection efforts. NAF concealed its conflict of interest and provided bogus arbitration services instead of legitimate dispute resolution services it promised and was contractually obligated to deliver to consumers.

The Attorney General of Minnesota recently exposed the concealed relationship between NAF and Mann Bracken, and the financial relationship with their common group owner, a group of New York hedge funds known as Accretive. According to the Attorney General’s complaint, NAF “is financially affiliated with a New York hedge fund that owns on of the country’s major debt collection enterprises,” which relationship NAF and Mann Bracken conceal from consumers. Within days, NAF was forced to announce it was getting out of the consumer arbitration business.

The People of the State of California also sued NAF in a consumer fraud action brought by the City Attorney for the City of San Francisco. According to the City Attorney’s complaint, based on NAF’s own statistics from 2003 to 2007, “in each and every case where a business entity brought a claim against a consumer and the matter was disposed of by hearing, the NAF arbitrator ruled in favor of the business entity — a 100% success rate.”

NAF and Mann Bracken worked hand-in-hand to create the illusion of legitimacy and due process, with the purpose of railroading consumers into a corrupt dispute resolution process and bilking consumers out of hundreds or thousands of dollars, including NAF charges and Mann Bracken’s alleged legal fees and costs. Despite revelation of their ruse, neither NAF, Mann Bracken, or any of the other Defendants, including Accretive, has returned the money consumers paid for “arbitration” services they never received.

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Defendants conduct is particularly egregious because it compromises the legitimacy of our judicial system. Courts depend heavily upon the perceived integrity and efficiency of private arbitration. Indeed, California and other states fostered the growth of the arbitration industry by streamlining the process of converting arbitration awards into judgments, as evidenced in Defendants’ Notice of Arbitration: “AN ARBITRATION MAY BE ENFORCED IN COURT AS A CIVIL JUDGMENT.” Defendants exploited this public interest opportunity by perverting private arbitration into an unregulated trough for themselves and the collections industry. Creditors who took their business to Mann Bracken and NAF did not have to worry about losing, which is exactly how Defendants appealed to large creditors and dominated the consumer debt arbitration market for years. Indeed, while holding itself out to the public as an independent and neutral. “[b]ehind closed doors, NAF [sold] itself to lenders as an effective tool for collecting debts.” BusinessWeek recently uncovered shocking examples of NAF’s marketing to debt collectors, including a late 2007 “confidential” Powerpoint presentation aimed at creditors that promised, among other things, “marked increase in recovery rates over existing collection methods.” The process of legitimizing alternative dispute resolution as an industry can only begin by requiring Defendants to disgorge their ill-gotten gains.





About the author

Steve Rhode

Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.

41 Comments

  • I had a debt with Mann Bracken and I wasn’t aware that they had been awarded a judgement until we attempted to refinance our house.  I am prepared to pay the amount ($1200), but I’ve found out they they are no longer in business.  I have not heard from any other collection agency in the past 2 years and my original creditor (Capital One) has no record of the debt under my name and/or SS#.  What should I do now?

  • Mann Bracken cannot collect the arb awards from October 2001-July 2009,  I see no way the debt could get passed to someone else at the conclusion of the National Class Action, where would the benefit for the Class be if that was allowed.  All claims between the Plaintiff Class and Defendant’s should be released according to the proposed settlement.

  • I had settled my $4,200something debt with Chase through Mann Bracken for a lump payment of $3,100something dollars. Recently I received a phone call from one of my other creditors saying that I was being penalized for having a negative reflection on my credit that was recent to this year. I said “there’s no way, I haven’t done anything negative in a couple of years, and the only negative thing I’ve ever had on my report was a settlement from 2008.” They said “I cannot go over specifics, but according to our records you are in default with a current creditor.” I was stunned! So I checked my credit report, and sure enough, the $1,100something dollars that was “forgiven” as part of the settlement is being reported by Chase as a “Charged Off” amount BALANCE over 120 days past due. Okay, first of all, I have a 1099-C which states that $1,100something as CANCELLED debt, and paid taxes out the ying-yang for it. Secondly, how they can claim this as both CHARGED OFF and a BALANCE? Shouldn’t this be a $0 balance with a changed off amount of the $1,100something? So I’ve been battling with Chase, and of course they have records of sending the 1099-C and of the large lump payment sent to them in January of 2008, but they’re claiming they don’t have any indication that the lump sum was the settlement amount and that they’ll continue to claim the charge off as a balance unless I can get a letter from the people with whom I’ve settled, which they know is Mann Bracken, which they ALSO know is out of business… So what the hell? Asking me to get a letter from a company that DOESN’T EXIST is like telling me to get them a 50 cent piece from the Tooth Fairy! What am I supposed to do? Credit Reporting agencies have NOT helped me ONE bit, even though there’s a TON of evidence for my case, just not this 1 measely letter that unfortunately I don’t know WHAT happened to it. When I had dealt with Mann Bracken and sent that payment I was given the impression that everything was taken care of, and being a naive 20 year old, I believed it…… fast forward, I’m frusterated and fighting with Chase constantly and getting nowhere. Isn’t this against the Fair Credit Reporting Act somehow? How can they claim balance AND claim tax on the same amount of money?! WTF? Don’t I have any rights???????

    • I understand your confusion and I’m afraid I don’t have loads of good news about this.

      Unless you have a written agreement that the settled amount is satisfaction of the full debt from Chase then you don’t have a rock solid settlement. Without that agreement then just because a debt is charged off and reported on a 1099 does not make the matter closed.

      A charge off is an accounting function and a 1099 is a reporting function. See this other article I wrote, “Debt Settlements May Be Voided And the Money Due Anyway.”

      Steve

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