Deborah Williams and Richard Welshan
Franchisee
Annapolis, MD
Deborah Williams’ and Richard Welshans’ dreams came true when they opened their own franchise of the Coffee Beanery in suburban Maryland. Unfortunately, it quickly turned into a nightmare. The company had used deceptive business practices to make the franchisees look more profitable than they actually were. They went into arbitration with the company to try and recover some of their losses. When Deborah and Richard found out that the arbitrator shared an accounting firm with the Coffee Beanery, they unsuccessfully tried to get her removed. Before the hearing, a state Securities Commissioner had already ruled that the company had violated Maryland law; however, the arbitrator overruled this finding. The arbitration procedure took place in Ann Arbor, Michigan so Deborah, Richard and their attorney had to fly to Michigan three times over the course of eleven days, costing them around $100,000. The arbitrator ordered Deborah and Richard to pay the Beanery $150,000. This miscarriage of justice has forced them to mortgage their home and file for bankruptcy. Even though this award was financially devastating, it pales in comparison to their loss of trust in the civil justice system.
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Wallace Hinshaw
Bank
Celebration, FL
When Wallace Hinshaw opened an account with Wachovia Bank, he had no idea of the torturous times to come. After being paid for a development project, Wallace deposited $27 million into his account. Inexplicably, the bank simply took out the money. Wallace tried to sue but was forced into binding arbitration because of a depositor’s agreement he signed when he opened the account. During arbitration, officers of the bank made unsubstantiated accusations against Wallace. They even called the US Attorney’s office and asked them to initiate a criminal investigation on him. Even though these accusations were later proven and admitted by the bank to be false, because arbitration does not allow for discovery and the results cannot be appealed, it was too little too late. Based on the false testimony, the arbitrator actually ordered Wallace to pay the bank $1.5 million. In the end, he was forced to pay over $50,000 in arbitration fees, with not a dime to show for it.
Donald White
Credit Card
Colorado
Donald had an account with MBNA America. Sometimes he was a little slow or could not make his credit card payments, so they sold his account to a third party collection agency, Scott Lowery of CACV of Colorado. Beginning in 2005, he paid a penalty every month and the penalty kept increasing. He asked them if he could pay it without interest because they had bought his account for just pennies on the dollar. But they only increased their relentless, “strong-arm” tactics. Against FTC rules, they called his job and his family and they threatened to sue him. When he explained that his daughter had a rare terminal condition which contributed to his difficult financial situation, the representative told him, “Well, maybe you’re being punished for not filling your obligation/paying your bills." The third party took him to arbitration with NAF, notoriously the worst arbitration company. He filled out all of the necessary information, about 15-20 pages, and mailed it to them. They said it was incomplete and did not contact him again. Finally, a month later he got a decision from the arbitrators that notified Donald that they had awarded CACV $17,000.
Dennis Reardon
Debt Collector
Brownsville, TX
In 2001, Dennis Reardon bought a Jeep Cherokee from a local dealer. When one of the payments did not get in on time due to the 9/11 attacks, a representative from Chrysler called. After Dennis explained the situation to him, he thought everything was taken care of and he put a new check in the mail. A few days later, Dennis’ mother began receiving harassing calls from a Chrysler collector. After Dennis asked them to stop harassing his mother, she used racial slurs and threatened him. When the supervisor tried to find the recording of the conversation, he discovered that it had “accidentally” been erased. The collector continued to call daily, harassing both Dennis and his mother. She even went as far as threatening his life. One day, he found three men trying to steal his truck. Instead of identifying themselves as representatives of the collection agency, they came at him swinging a flashlight. The police were called and deescalated the situation. When Dennis tried to sue, he was sent to arbitration. After the arbitrator ruled against him, Dennis found out that he was a corporate attorney who had been paid by Chrysler.
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