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Debt Collection Law Firms Beware

The Consumer Financial Protection Bureau is cracking down on Debt Collection Law Firms that operate as ‘lawsuit mills.’ Many Debt Collection Law Firms operate using high speed computer software that converts consumer information, commonly stored in excel spreadsheet format, into form based law suits without any meaningful attorney review. These “lawsuit factories” file thousands of lawsuits each year seeking to collect from people that allegedly owe a debt to the Law Firm’s client. Without any meaningful attorney review, the law suit is filed and the court process begins. The problem with the speed at which these complaints are filed is the fact that very little investigation is made as to whether these are valid debts, or debts of the person actually being sued.

The Consumer Financial Protection Bureau is investigating the practices of the Law Firms that operate with a few attorneys and large support staffs enabling them to file in mass. The Consumer Financial Protection Bureau has sued a Georgia based law firm, Frederick J. Hanna & Associates PC, and its three principal partners, for violating several State and Federal Laws. The behavior of the law firm is described as a factory that operates as a mass lawsuit mill that churns out false and misleading lawsuits to deceive Courts and Consumers alike:

The CFPB alleges that the firm operates like a factory, producing hundreds of thousands of debt collection lawsuits against consumers on behalf of its clients, which mainly include banks, debt buyers, and major credit card issuers. Between 2009 and 2013 the firm filed more than 350,000 debt collection lawsuits in Georgia alone. The CFPB further alleges the defendants collected millions of dollars each year through these lawsuits, often from consumers who may not actually have owed the debts.

It is an important reminder to Consumers that face Debt Collectors: you have rights and you should contact an attorney to make sure they are enforced. Don’t Be a Victim of abusive or misleading Debt Collectors. Our firm is experienced in Consumer Advocacy, call us today!

Here is a link to the CFPB article and Complaint.

Written by
David Parnell Esq.
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