Consumers using credit cards, cell phones and other forms of credit -- meaning most Minnesotans -- got a major victory this week when state Attorney General Lori Swanson announced that the St. Louis Park-based National Arbitration Forum, the country's largest arbitrator of credit collections, would stop most of its work in the state.

This came just a week after the attorney general's office filed a lawsuit accusing National Arbitration of deceiving credit consumers into believing it would be a neutral party in arbitration hearings. Instead, the National Arbitration engaged in what Swanson characterized as "behind-the-scenes hustling" tilted toward consumer credit companies.

"The right to have a dispute resolved through an impartial judge or jury is really very deeply embedded in our values, our democracy," said Swanson. "Yet we were finding that millions upon millions of consumers were giving away their right without even knowing it.'' She said credit card companies, cell phone companies and lenders put into the fine print of a variety of contracts clauses called mandatory predispute arbitration clauses. "And through these clauses the consumer waives in advance their right to a day in court."

While some now claim that a day in court may get very crowded if consumers go through the legal process for dispute resolution, it's preferable to a system that allegedly was gamed in favor of big business against the little guy.

"It was an affirmative plan to use arbitration to ring extra dollars out of consumers that they otherwise wouldn't owe, in situations when it was not the consumer complaining, but the businesses using it as a business strategy after the sale to conduct essentially improper collections," said Prentiss Cox, associate professor of law at the University of Minnesota and former manager of the consumer division within the attorney general's office.

National Arbitration denied guilt or responsibility for the suit's allegations and will be allowed to continue arbitrating Internet domain name disputes and personal injury claims, among other cases.

While National Arbitration may be the biggest business involved, it isn't the only one. Swanson has already called on the New York-based American Arbitration Association, which also provides consumer credit arbitration services, to "not to capitalize on the market niche" now available.

But with credit cards and cell phones knowing no state borders, it's well past time for Congress to pass a law to better protect consumers. Swanson testified before Congress on Wednesday in support of a bill that would do just that. Especially in these tough times, removing deception from consumer transactions is a worthwhile goal. After personnel disputes resulted in a distracting, troubled transition from her predecessor, Mike Hatch, the National Arbitration case is a good example of Swanson using her office effectively to protect Minnesotans.

"It's a big deal," said Cox. "This is a very significant case. The information [Swanson] recovered in it will be very important in the debate on mandatory arbitration."