CompuCredit Corp. v. Greenwood

(Whether the Credit Repair Organization Act, 15 U.S.C. § 1679 creates a non-waivable right that prevents the enforcement of an arbitration clause.)

Respondent argues that Petitioner advertised a credit card that would help rebuild their poor credit scores and required no deposit. Respondent further alleges that the Petitoner charged $257 in fees against the available $300 in credit. The fees were mentioned in the advertisement in an inconspicuous area of the contract in very small font.

The district court found that the arbitration clause in the contract was unenforceable under the Credit Repair Organization Act (CROA) because language in the statute shows Congress’ intent to create a non-waivable right to sue in a court of law. The court of appeals affirmed finding that the plain language of the statute, “you have a right to sue a credit repair organization that violates the [CROA]” combined with “any waiver by any consumer of any protection provided by or any right of the consumer in this subchapter…(1) shall be treated as void” showed Congress’ clear intent to create a non-waivable right to sue in a court of law.

CompuCredit Corp. argues that the plaintiffs have the burden of demonstrating that the act shows Congress’ specific and clear intent to preclude an arbitration clause. They argue that the section of the Act that refers to preventing enforcement of any CROA rights by a “court or any other person” acknowledges the possibility of using a system outside a court of law because of the use of “any other person”. Additionally, the defendants argue that the “right to sue” language does not create a guarantee of any substantive right to sue in a court of law but merely establishes civil liability for violation of the statute.