Claybrook said that even though a consumer may trash what they consider junk mail from The National Arbitration Forum also known as "the forum," that consumer may nonetheless receive a legal judgment against them months later accusing them of owing thousands of dollars on a credit card they received in the mail but never opened or never used. Claybrook said it's not impossible and happens all the time.  

She said companies hire private arbitrators to make judgments based only on documents submitted by credit card companies, who give consumers no other options for arbitration if they want that card. She characterized the private courts that consumers are forced to operate in as a "bizarre and jerry rigged private system" with no way out for consumers. Claybrook said such courts should be prohibited by law because they don't allow consumers the fundamental right to go to public courts to resolve disputes with credit card companies.

The secret courts, she said to reporters in the room and on the phone, are "unfair and should be prohibited by law" because they don't provide for written transcripts, which can cost hundreds of dollars to obtain, and appeals to public courts are virtually impossible. She said big corporations stack the deck against consumers, "who have little chance to defend themselves against terrible abuses of credit card companies and their life threatening penalties on interest rates."

Banks select arbitration firms, funneling millions of dollars into for profit firms that issue rulings favoring business.

ONE CONSUMER TELLS HIS STORY

In the room was Troy Cornock, a consumer from Hillsboro, New Hampshire, who told his story of woe about a ten-year battle he had with The National Bank of America (NBA), who he described as the "wrecking ball in my life for last ten years" due to their dogged pursuit of him over a credit card account of their he never signed up for and didn't know anything about, which culminated one night in the local sheriff showing up at his house to enforce collection judgments against him by NBA and its designated collection agency.

Although Cornock said he eventually won his case after he secured the services of an attorney, he said the ordeal was uncalled for an unnecessary. "My American dream was turning into a repetitive nightmare," he said in a dispirited tone. He said no one should have to fight for the rights "we already have."

FEINGOLD MAKES HIS CASE FOR TRANSPARENCY AND ACCESS TO COURTS

Joining the conference between votes, Feingold said that arbitration is touted as more efficient and less expensive alternative to litigation, and while that can be the case when both parties are free to choose arbitration with terms that assure a level playing field, the reality is that more and more companies are requiring customers to enter into binding mandatory arbitration before obtaining a job or credit card or a franchise.

Feingold: "Consumers and employees have little bargaining power and are effectively forced to accept arbitration. This report sheds new light on problems, and it should come as no surprise that arbitration firms who get paid by companies rule in their favor. One CA arbitration company ruled in favor of credit card companies in 94% of cases, which shows what consumers are up against.

Feingold said that because public courts can reverse decisions in only the most egregious cases, arbitrators feel free to ignore the law undermining the statutory protections that Congress has so carefully provided for American workers, investors and consumers. Congress can stop companies from using their unequal bargaining power to force consumers into pre-dispute arbitration clauses in contracts.

Feingold said his bill, which has Sen. Richard Durbin, a Democrat from Illinois as a co-sponsor and is sponsored in the House by Hank Johnson, a Democrat from Georgia, will allow an arbitration selection to made only after a dispute arises, not as a pre-condition to the original agreement, which a consumer cannot refuse if they want the credit card.

"The bill would make arbitration more fair and represents a chance to restore fairness into system," Feingold said.

NEXT STEPS AND WHAT STATES CAN DO

According to PC's Website, the report focuses particularly on predatory practices in California, the only state that requires arbitrators to publicly disclose information about their practices. The findings, nonetheless, provide a snapshot of how arbitration traps consumers throughout the country in unfair, secret proceedings where for-profit arbitrators make the rules. PC's research uncovered consumers who spent years fending off collection agencies, cleaning up identity theft messes and struggling to bounce back from credit rating hits.

Responding to a question on what's next, Claybrook said more co-sponsors and hearings are needed.

MacCleery talked about the eight-month investigation that delved into 33,948 California cases in an effort to provide transparency to public data that she said was offered in strange formats and hidden in obscure places on arbitrator firm's Websites.

If the percentages of rulings in favor of companies is the same nationally for the 58,000 arbitration cases as it is for the 33,948 California cases, 95 percent will go against consumers. She said some arbitrators, like a group of 28 in California, can charge upwards of $400 an hour for their services and make millions of dollars a year.

MacCleery said Feingolds bill would not just apply to credit card companies but to al all binding mandatory arbitration contracts.

She said states can do several things themselves, such as make arbitration data available, based on the California model, and to exempt state insurance contracts, which they control and regulate, from coverage of the federal arbitration act. She said courts have found in those cases, the federal insurance regulation provides that states can control insurance, so therefore insurance laws are reverse preempted and states have extraordinary control over them.

She encourage state lawmakers to regulate arbitration firms by encouraging them to be transparent and also to exempt the scope of their state arbitration regulation insurance contracts and to better regulate them and make them more consumer friendly.

She closed her comments by saying that she considers the law as having gone astray, based on a ruling by the U.S. Supreme Court on the Federal Arbitration Act which said a consumer can waive the right to court when they sign a contract that provides for binding mandatory arbitration.

"We think this is a miscarriage of justice and will be corrected by the bill," she said.