CFPB Brings the Hammer Down on Georgia Law Firm for Illegal Debt Collections

A new order from the Consumer Financial Protection Bureau will stop a law firm in Georgia from issuing multiple, illegal collections lawsuits and will make the firm pay a $3.1 million fine.

Recently, in Washington D.C. the Consumer Financial Protection Bureau filed a proposal to log a consent order in the federal courts that would bring a lawsuit against a Georgia law firm called Frederick J. Hanna & Associates to an end. The law firm – along with its three principal partners – is accused of operating a debt collection lawsuit mill that made use of illegal/deceptive practices. The lawsuit filed by the Consumer Financial Protection Bureau (CFPB) alleges that the law firm utilizes deceptive court filings and fake evidence to crank out multiple lawsuits against consumers. If it is approved by the court, the order would ban the firm and its partners from using illegal debt collection actions, which includes filing lawsuits without first verifying if the consumers actually owed on debts, along with incriminating consumers with bogus court filings. This order will also require the law firm and the partners to pay a $3.1 million fine.

Commenting on the proposed order, the director of the CFPB Richard Cordray said, “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. Debt collectors that use the court system for purposes of intimidation should reconsider how their practices are harming consumers.”

The bulk of the work that the Hanna law firm works on includes litigation on debt collections. The three main partners, Frederick J. Hanna, Robert Winter and Joseph Cooling all play major roles in the company’s day-to-day operations and business strategies. The firm uses their debt collection practices on behalf of their clientele, which includes credit card companies, debt purchasers and even banks. If the firm’s debt collection actions are not successful, they tend to file lawsuits against consumers in order to retrieve funds.

As far back as the summer of 2015, the CFPB filed suit against the firm and its principal partners in the North District of Georgia federal courts. The proposal, if it is approved, would officially bring the case to closure. In the complaint filed by the CFPB, the bureau charged the firm with a direct violation of the Dodd-Frank Wall Street Reform and Consumer Protection Act’s ban against using deceptive practices, along with the Fair Debt Collection Act for the following infringements:

Consumer intimidation via deceptive court filings. The CFPB states that the law firm collected on suits that were signed by attorneys, when there was no actual involvement from attorneys at all.

Using bogus evidence – The CFPB says that the firm filed statements in court without providing full details to consumers who signed on the statements. Over a six year span, the firm dismissed thousands of suits because they could not substantiate allegations involved in the cases.

The Consumer Financial Protection Bureau is taking a lot of action against debt collections companies and law firms that act on behalf of the collectors. Any companies that are performing illegal/deceptive activities, and hoping to fly under the radar should be aware that the bureau is not letting these types of defendants off the hook very easily these days. If the charges against this Georgia law firm are true, then it is a good thing that they are finally being brought to task for making a profit by deceiving consumers and clogging up the legal system with unnecessary lawsuits.

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