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CFPB Sues Law Firm




by:
Peter L. Cockrell
Greenberg Traurig, LLP - McLean Office

Brett M. Kitt
Gil Rudolph
Greenberg Traurig, LLP - Washington Office

J. Scott Sheehan
Greenberg Traurig, LLP - Houston Office

 
July 31, 2014

Previously published on July 22, 2014

On July 14th, the CFPB sued a law firm alleging that it used deceptive court filings and unsubstantiated evidence to intimidate consumers into paying for debts. The CFPB alleges that the law firm operated “like a factory,” producing hundreds of thousands of such lawsuits. Specifically, the CFPB is alleging that the law firm engaged in the following conduct:

  • Deceptive court filings: The CFPB alleges that the debt collection suits filed by the law firm, which purported to be “from attorneys,” were the result of an automated process and that the work was actually performed by non-attorney staff without meaningful involvement from attorneys.
  • Faulty or unsubstantiated evidence: The CFPB also alleges that the law firm filed sworn statements made by its clients attesting to details about consumer debts when in some cases the signers could not possibly have known those details.

The complaint alleges that this conduct violated the Fair Debt Collection Practices Act, which prohibits debt collectors from misrepresenting to consumers that a communication is from an attorney. The complaint also alleges that the alleged conduct violated the Dodd-Frank Act’s prohibition against engaging in deceptive and abusive practices. The CFPB is seeking restitution for the alleged victims, a civil money penalty, and an injunction against the law firm.



 

The views expressed in this document are solely the views of the author and not Martindale-Hubbell. This document is intended for informational purposes only and is not legal advice or a substitute for consultation with a licensed legal professional in a particular case or circumstance.
 

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Author
 
Peter L. Cockrell
Brett M. Kitt
Gil Rudolph
J. Scott Sheehan
Practice Area
 
Finance
 
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