Consumer advocates have known
collections company lawyers often can't prove their cases for years.
Now the Consumer Financial Protection Agency says one creditors'
rights law firm's tactics actually violate consumer protection laws
by using unfair collections practices.
The Consumer Financial Protection
Bureau has filed a lawsuit against one of Georgia's largest
“Creditors' Rights” law firms, claiming the firm's lawyers
weren't meaningfully involved in their cases and that their processes
violated the Fair Debt Collection Practices Act (FDCPA) and the
Consumer Financial Protection Act (CFPA).
So-called Creditors' Rights law firms
sue consumers for past due debts on behalf of the collections
companies. In the case of the Georgia-based law firm defendant in the
lawsuit, the firm's eight to 16 attorneys had filed over 350,000
lawsuits in four years. According to the Bureau, the attorneys relied
on support staff and automated systems to do everything from
researching cases to preparing filings – spending no more than one
minute reviewing each document.
The Bureau's complaint also claimed
that the lawyers for the collections companies knew the debts they
were suing to collect had been purchased by debt buyers, so no one at
the companies had personal knowledge of how the debts came to be.
According to the Bureau, this means the lawyers knew or should have
known that they wouldn't be able to prove their cases when they were
filed. This could explain why the firm voluntarily dismisses about
155 collections cases every week.
This month, the federal judge refused a
request to dismiss the Bureau's lawsuit. That means that the
creditor's rights firm could be financially liable for filing
lawsuits it knew couldn't win and misrepresenting their lawyers'
involvement in the cases they file. It could fundamentally change how
collections law works across the country.
The single best way to defend against
these kinds of collections harassment lawsuits is to hire a lawyer as
soon as you are contacted by a collections firm. Consumer advocates
like the attorneys at The Liblang Law Firm, P.C., know the tactics of
creditor's rights attorneys, and they know how to fight them. The
Bureau has found, “consumers who retained attorneys were almost
four times more likely to have their cases dismissed.”
According to Michigan consumer
protection attorney Dani K. Liblang:
“It is great to see the CFPB taking an interest in cleaning up these practices. These days, when one’s credit history is used not only to judge creditworthiness but, also, to determine such other life necessities as insurance rates and employment eligibility, protecting the integrity of the system is even more important than ever.”
The consumer protection attorneys at
The Liblang Law Firm, P.C. are ready to defend you against the
harassing tactics of creditors' rights firms trying to collect on
your debt. If you have been the victim of collections harassment,
contact The Liblang Law Firm, P.C., for a free consultation.
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