Wednesday, August 13, 2014

The Consumer Financial Protection Bureau Takes Action Against Debt Collection Law Firm

The Consumer Financial Protection Bureau (CFPB) filed a lawsuit against a debt collection law firm, Frederick J. Hanna & Associates (Frederick Hanna).  The suit alleges that the debt collection firm spent less than a minute reviewing each of the credit card collection cases.  More than 350,000 cases were filed by the law firm, and many of the individuals targeted owed nothing or less than the amounts claimed.  Individuals targeted in similar suits as those filed by Frederick Hanna, often do not appear for the court cases.  As a result, many cases end in a default judgment, which can be difficult to correct, allowing the debt collector to garnish wages or put a lien on property.
The lawsuit filed by CFPB indicates that CFPB may be looking into other debt collection law firms, where claims are out of date, have incorrect amounts, and do not include the necessary documentation to back up the claims. 

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