Georgia Debt Collection Law Firm shuts ‘Lawsuit Factory’ accusation with $3.1 M settlement fee

A law firm in Georgia specializing in debt in collection has settled a "lawsuit factory" complaint with $3.1 million. The firm agreed to pay the fee without admitting or denying the wrongful conduct.

Georgia law firm Frederick J. Hanna & Associates initially filed a motion to dismiss the case filed by the U.S. Consumer Financial Protection Bureau accusing the firm of running a debt collection lawsuit mill in violation of the federal consumer-protection law. The judge later rejected the said motion in July and the settlement followed months after.

According to the bureau, the law firm mechanically and monotonously processed more than 350,000 credit card collection complaints against consumers, some of whom may owe nothing or owed less than was claimed. The Lawyers for the firm were alleged to have been typically spending less than a minute reviewing each suit.

"The Hanna firm relied on deception and faulty evidence to coerce consumers into paying debts that often could not be verified or may not be owed," states CFPB Director Richard Cordray.

In addition to the penalty fee, the ruling also announced on Monday that the firm is forbidden from filing or threatening lawsuits to enforce debts "unless they have specific documents and information showing the debt is accurate and enforceable," according to the federal agency.

The person signing affidavits attesting to details about a debt which is to be submitted by the firm should also be present and that he has personally reviewed the sworn statements himself. This is because investigations found out that the people targeted by the collection lawsuits often do not know or do not show up in court resulting in judgments that can be difficult to correct.

Hanna Firm released a statement that bears, "In spite of the Bureau's allegations about our firm, we did not institute any pattern or practice with the intent to deceive or harm consumers" arguing that the required policies and procedures outlined in the agreement are ones that they have been following for years.

The said Georgia debt collection law firm has consented to the settlement of over $3 million and was also required to end its shady collection tactics, deceptive court filings, and reform the practices of its lawyers.

Tags

Frederick J. Hanna & Associates, Georgia law firm, U.S. Consumer Financial Protection Bureau, Lawsuit mill, Debt collection law firm, Settlement fee, penalty

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