In what is probably an unprecedented move, a federal regulator has filed a lawsuit accusing a debt collection law firm of violating the Fair Debt Collection Practices Act because the law firm is a mill, and taking a factory approach to litigation. Specifically, the lawsuit alleges that in filing over 300,000 lawsuits, there was a lack of meaningful attorney involvement in the lawsuits, and that the lawsuits utilized affidavits which falsely stated that they were based on personal knowledge. One aspect of the lawsuit that has not received much coverage is Paragraph 24, which alleges that the lawyers should have examined the Forward Flow Agreements prior to filing suit: “For affidavits received from its debt-buyer clients, the Firm’s attorneys did not determine whether any underlying documentation for the debt was available, nor did they review the contracts governing the sale of accounts to determine whether those contracts disclaimed any warranties regarding the accuracy or validity of the debts.“ I have written about these disclaimers here.
Consumer Financial Protection Bureau Sues Large Debt Collection Law Firm, Calling it a “Mill” and a “Factory.”
- by pholland