A debt collection law firm filed scores of debt lawsuits without confirming basic facts about the debt in question, allowing the lawyers to collect substantial amounts of money from people who owed less than alleged or nothing at all.
According to a Consumer Financial Protection Bureau complaint filed Friday, Commack, New York-based Forster & Garbus, LLP filed suits “on a massive scale” by relying on automated templates and devoting mere minutes to reviewing the facts of the cases. This approach allowed the firm to file tens of thousands of debt lawsuits each year from 2014 to 2016. A single attorney signed complaints for more than 41,000 accounts in just three years.
Most defendants in debt lawsuits cannot afford an attorney, and they often don’t appear in court, so cases of this kind often end in default judgments, meaning the court automatically rules in favor of the party that shows up. Even if they appear and can legitimately dispute the debt allegations, unrepresented defendants are less likely to prevail in court than they would with an attorney.
CFPB accused Forster & Garbus of filing deceptive collection suits and requested the court grant an injunction and order the firm to pay a civil penalty and restitution to consumers. Forster & Garbus and CFPB did not respond to requests for comment.
Many of Forster & Garbus’ clients are debt buyers, like Midland Funding, or creditors previously accused of breaking debt-collection laws, according to the suit. In 2015, a consent order with Midland Funding said the company had tried to collect debts that it knew or should have known were inaccurate and couldn’t be enforced legally.
Since 2014, Forster & Garbus filed more than 99,000 collection lawsuits, with partner Mark Garbus approving 90 percent of the potential lawsuits presented to him. The firm didn’t obtain or review supporting documentation from their clients, so most suits were filed without the attorneys ever looking at payment histories, billing statements and other records that would confirm the veracity of the debt allegations.
If non-attorney staff members were unsuccessful in collecting a debt, the firm would check to make sure the consumer hadn’t filed for bankruptcy and wasn’t dead or an active military member before beginning the process to file a suit. The lawsuits were composed using a template, auto-populated with data provided by the firm’s clients – data that the firm didn’t verify.
After another attorney created the document, associate attorneys would go over the suits, with one reported to spend only “a minute or two” to review them. According to CFPB’s complaint, one former associate didn’t know if the information from the firm’s clients was accurate, yet he signed complaints for 41,508 accounts from 2014 to 2016 – enough for an average of 38 suits per day during those three years.
Have you had an experience with a debt collection firm that you’d like to share with Big If True? Contact Mollie Bryant at 405-990-0988 or bryant@bigiftrue.org.
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