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Last month, the U.S. Consumer Financial Protection Bureau filed a lawsuit against a debt-collection firm from Marietta, Georgia for violations of federal consumer-protection laws, according to The Wall Street Journal.
The lawsuit could end the way law firms file cookie-cutter lawsuits to collect money from people who do not pay their bills.
The firm in the lawsuit is that of Frederick J. Hanna & Associates.
The firm handled more than 350,000 credit card collection complaints against consumers, as noted in the complaint, which was filed in federal court. The lawsuit alleges that some of those consumers might owe nothing or less money than was claimed. It also alleges that the lawyers for the firm spent less than one minute reviewing each complaint.
Lawyers from the firm said that they work to ensure the collection of the debts are valid and for the correct amount of money.
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Back in 2010, a court in Georgia ruled that a state consumer official who wanted to investigate the firm’s practices did not have any authority to do so.
“We have successfully defended ourselves against these types of claims before,” said Joseph Cooling, the law firm’s managing partner.
The Consumer Financial Protection Bureau said that it will sue law firms if they decide to operate as debt-collection agencies instead of legal advisers.
