BofA credit settles lawsuit over collection practices

Source: Bloomberg News, L.A.Times (Free Registration)

Bank of America Corp.'s credit-card unit agreed to pay $5 million and suspend arbitrations of consumer debt collections in California for two years to settle San Francisco's lawsuit over its collection practices. The agreement, filed Monday in state court in San Francisco, resolved a 2008 lawsuit alleging that Bank of America's FIA Card Services unit used an arbitration service that was biased in favor of the bank and against consumers. The National Arbitration Forum Inc., based in Minneapolis, employed unfair business practices while administering arbitrations for consumers who owed credit-card debt to the unit, according to the lawsuit.

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