Debt Collection Ruling Spotlights Abusive Practices

The problem of unfair consumer debt litigation tactics—which may keep those with unpaid bills from contesting their cases in court —has come into sharp focus after a Manhattan federal court certified a class of consumers victimized by “sewer service” and other abusive debt collection practices.

U.S. Circuit Judge Denny Chin certified a class of thousands of plaintiffs who had default judgments entered against them after they were sued over their unpaid debts in civil court in New York City, according to Reuters.

Chin’s ruling involves a lawsuit against Leucadia National Corp., a debt buyer, and Mel S. Harris Associates, a law firm that handles debt collection. The suit claims that the two used tactics such as “sewer service” to keep consumers from finding out about a legal action until after obtaining a default judgment.  Sewer service keeps notice of a lawsuit from being delivered properly or at all to a defendant, according to Reuters. 

Such tactics may mean that consumers may not show up to contest the proceedings and will get default judgments listed for them.  In the event of a default judgment, the creditors may seek to garnish the defendant’s wages and get their bank accounts frozen in order to collect unpaid debt.

If you or someone you know has been harmed by unfair debt collection practices, contact Sokolove Law today for free legal consultation and to find out if a consumer fraud lawyer may be able to help you.

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