Lawsuit Filed Against Portfolio Recovery Regarding Unfair Arbitrations

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Lawsuit claims that Portfolio improperly filed claims against consumers with an arbitration service it knew to be biased in its favor.

Atlanta-based law firm Webb, Klase & Lemond, LLC has filed a class action lawsuit against debt collection firm Portfolio Recovery Associates, LLC alleging that Portfolio improperly subjected consumers to arbitration with National Arbitration Forum, Inc. ("NAF"), an arbitration service it knew to be biased in favor of creditors. All persons who have been victimized by a Portfolio arbitration through NAF may eventually be included in the class of persons covered by this lawsuit.

According to the lawsuit, the Plaintiff fell behind on his account with MBNA, a national credit card company. Portfolio then purchased this debt and filed an arbitration claim with NAF. The NAF arbitrator awarded Portfolio an amount that was much greater than the Plaintiff's true debt.

The complaint alleges that Portfolio misrepresents to consumers that NAF is an unbiased, neutral entity that will give them a fair hearing. However, according to the suit, Portfolio is aware that NAF is beholden to creditors and renders decisions against consumers nearly 100 percent of the time. Despite its knowledge of these facts, Portfolio accepted NAF judgments and moved to enforce them in various courts. The Minnesota Attorney General has recently sued NAF based on its improper practices and NAF has agreed never to arbitrate consumer matters again. NAF's settlement with the Attorney General, however, does not void any arbitrations that have already occurred.

The Plaintiff has brought claims for unconscionability, breach of contract, violation of the Fair Debt Collection Practices Act, negligent misrepresentation, and contravention of public policy. The case was brought in the Superior Court of Muscogee County in Columbus, Georgia but was removed to federal court. The case, styled Barkwell v. Portfolio Recovery Associates, LLC, is pending in the United States District Court for the Middle District of Georgia and has been assigned Case Number 4:09-CV-113-CDL. The case is likely to be remanded to the Superior Court but will still, with court permission, pursue claims on behalf of all persons in the United States who were victimized by Portfolio.

If you wish to discuss this action or have any questions concerning this press release, please contact E. Adam Webb, Esq. by e-mail or by calling (770) 444-9325. Webb, Klase & Lemond, LLC is a law firm that practices complex litigation with a focus on litigation arising from wrongful deprivations by corporate and government entities. You may visit our website at


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