Recently, the Consumer Financial Protection Bureau (CFPB) brought administrative proceedings against the New Jersey law firm of Pressler & Pressler (along with its two managing partners Sheldon Pressler and Gerard Felt) and the debt buyer New Century Financial.
The proceedings alleged multiple violations of the federal Fair Debt Collection Practices Act. Each of these entities later entered into consent orders in these actions that reveal some startling facts.
The Sins of Pressler & Pressler
According to the consent order against the firm, from 2009 to 2014:
- Most accounts that are placed with them for collection are transmitted through an electronic system;
- The data included in these submissions is in summary form only and did not include documentation;
- For such electronically transmitted claims, they normally received only either an Excel spreadsheet or a text file containing specific data regarding each account, or claim for a debt;
- In creating the summons and complaint, the staff relies on the summary data the client provided and the results of the pre-filing claim reviews;
- Actual attorneys generally spent less than a few minutes, sometimes less than 30 seconds, reviewing each case before filing suit;
- of the signing attorney’s review, he or she did not have access to sufficient documentation to confirm the validity of the summary data provided by the debt buyer;
The firm filed the majority of the lawsuits against consumers on behalf of debt buyers. Those debt buyers often could not support their collection activities with basic documents, such as
- the original contracts underlying the alleged debts,
- documentation of the consumer’s alleged obligation, or
- the chain of title evidencing that the debt buyer actually owned the debt and thus had standing to sue the consumer.
The firm also filed the lawsuits without independently investigating or verifying support for the suits, including whether the facts alleged were true, and in instances where they had information that the facts alleged were unsupported, including but not limited to where:
- Consumers disputed, challenged, or questioned the validity or accuracy of the debt and Pressler failed to obtain Original Account-Level Documentation before continuing collecting on that account; or
- Pressler had knowledge or reason to believe, based on its past course of dealing with its clients’ accounts (including factors such as consumer disputes, inaccurate or incomplete information in the portfolio, and contractual disclaimers related to the accounts) that a specific portfolio of the client’s accounts might contain unreliable data, but continued to represent that consumers owed the claimed amount on the accounts in question without obtaining and reviewing Original Account- Level Documentation.
For all of these actions and more, Pressler & Pressler (and the two managing partners) were ordered to pay a civil money penalty of $1,000,000 to the CFPB. New Century Financial was also held accountable for its end of these violations. It was ordered to pay a civil money penalty of $1,500,000.00.
So What’s the Take-Away?
Anyone being sued by a debt buyer in New Jersey should seriously consider fighting the claim. New Century Financial is not the first one to run afoul of the CFPB; Midland Funding was outed for all of their practices as well.
When it comes to these claims, pushback pays off, and many times can lead to the dismissal of their case or a very favorable settlement. One should never take their claims at face value.
I Can Help!
If you live in southern New Jersey and want a lawyer to help you fight the claim of a debt buyer, feel free to call my office at 856-432-4113 or contact me through this site to schedule an appointment in my Woodbury office to discuss your case. Let me help you push back!
Want more information on how to fight back with your creditors? Then download my free book, The Biggest Secrets Your Creditors Don't Want You to Know or check out my Financial Freedom Podcast episode on dealing with debt buyers.