Archive for 'class action'

Lemberg & Associates Wins $350,000 Class Action Award Against Debt Collectors Portfolio Recovery Associates

Thursday, March 28th, 2013 at 6:58 pm  
Leave your comment

On behalf of Jason Zimmerman and other consumers, Lemberg & Associates (www.stopcollector.com) has won a $350,000 class action award against debt collection agency Portfolio Recovery Associates for violations of the Fair Debt Collection Practices Act (FDCPA). This is the largest reported judgment in a Fair Debt Collection class action case. According to Sergei Lemberg, who was labeled the “most active consumer attorney” of 2012 by debt collection industry insider WebRecon LLC, “We are gratified that the judge saw it fit to impose a significant, meaningful penalty for PRA’s intentional violations of the FDCPA.”

The court ruled that Portfolio Recovery Associates violated the FDCPA by sending 990 consumers debt collection correspondence that simulated legal process. The package consisted of a letter plus a set of legal-looking documents, such as a draft Summons and Complaints. According to Lemberg, “The FDCPA prohibits dissemination of fake legal papers on its face. The court rightfully labeled Portfolio Recovery Associates’ behavior ‘unscrupulous.’”

Portfolio Recovery’s unscrupulous behavior was just one of the factors the court used in determining the $350,000 award. According to Lemberg, “We were pleased that the judge noted that Portfolio Recovery’s FDCPA violations were ‘intentional’ and ‘egregious,’ and that a sizeable award was appropriate.” Indeed, the judge wrote, “The sanction imposed must be sufficient to deter PRA from engaging in abusive practices in the future.”

The court determined that each class member who returned the appropriate claim form would receive $500, that the lead plaintiff, Mr. Zimmerman, would receive $1,500, and that any remaining monies would be awarded “to a non-profit organization working to curb abusive debt collection practices or to increase consumer awareness of such practices.”

Lemberg concluded, “It’s fitting that a portion of the award will go to consumer advocacy organizations. The court’s decision should a clear message to debt collectors that they will be held accountable when they engage in shady practices.”

This release references Zimmerman v. Portfolio Recovery Associates, LLC (U.S. District Court, Southern District of New York, 09 Civ. 4602 (PGG)).

Another Step Closer to Class Action Certification

Monday, February 18th, 2013 at 12:52 pm  
Leave your comment

A report and recommendation from a magistrate judge means that Butto and Houser v. Collecto, Inc. (U.S. District Court, Eastern District of New York, Case No. 2:10-cv-02906(ADS)(AKT)) is one step closer to receiving class certification. Lemberg & Associates is representing Victoria Butto, who are suing Collecto, Inc. (doing business as EOS/CCA) for unlawful and predatory debt collection practices. The suit alleges that Verizon Wireless turned over Ms. Butto’s debt to Collecto for collection. Collecto sent her a debt collection letter that added collection fees to the amount owed. Collecto had made arrangements with Verizon that they would receive their payments when Collecto had successfully collected on the debts. If Collecto didn’t collect on the debt, they weren’t entitled to any fees. Because no monies had been recovered at the time Collecto sent the letter, it was not entitled to its collection fees. The suit alleges that Collecto therefore misled Ms. Butto by creating a false impression that they incurred collection fees and owed that money, in violation of the Fair Debt Collection Practices Act.

The Report and Recommendation filed by the court recommended that the presiding judge grand class certification to the following: New York consumers who were sent a collection letter by Collecto, Inc. DBA EOS/CCA for a Verizon Wireless account, which included a collection fee for Verizon Wireless service that hadn’t yet been incurred when the letter was sent.

TCPA Class Action Complaint Against Westlake Financial Services

Thursday, February 7th, 2013 at 3:09 pm  
Comments (1)

On behalf of a client and others similarly situated, Lemberg & Associates filed a class action lawsuit in Scott v. Westlake Services LLC, dba Westlake Financial Services. The suit alleges that Westlake Services negligently, knowingly, and/or willfully placed automated calls (“robocalls”) to our client’s cell phone in violation of the Telephone Consumer Protection Act (TCPA).

The class representative was subjected to repeated cell phone calls from Westlake Services, in which Westlake Financial Services used an automatic telephone dialing system (ATDS). The TCPA prohibits ATDS calls and calls using an artificial or prerecorded voice to a cell phone without prior express consent by the person being called.

Even though our client asked Westlake Financial Services to stop making robocalls to her cell phone, the company continued to do so. Moreover, she never gave her prior express consent to receive such calls.

According to the complaint filed in U.S. District Court, Northern District of Illinois, the proposed class consists of all people within the U.S. who received one or more cell phone calls from Westlake Financial Services and who didn’t provide prior express consent for such calls.

The suit seeks statutory damages of $500 per call, triple damages of $1,500 per call, and injunctive relief prohibiting future calls from Westlake Financial Services.

If you received a cell phone call from Westlake Financial Services without your consent, call Lemberg & Associates at
.

Appellate Court Ruling Favors Lemberg Client

Wednesday, August 1st, 2012 at 7:44 pm  
Leave your comment

The U.S. Ninth Circuit Court of Appeals ruled that a debt collection letter sent to a consumer “in care of” an employer is a violation of the Fair Debt Collection Practices Act. Lemberg & Associates’ client, Catherine Evon, is the plaintiff in the case. We’re pleased that the appellate court ruled in her favor. Our press release about the decision is as follows:

Reversing the findings of the U.S. District Court, the U.S. Ninth Circuit Court of Appeals has ruled that sending a debt collection letter to a consumer’s workplace is a violation of the Fair Debt Collection Practices Act’s prohibition on communications with third parties. In Evon v. Law Offices of Sidney Mickell, the defendant sent a debt collection letter to Catherine Evon in “care of” her employer, even though she had requested that they not contact her at work. As the appellate court’s majority opinion noted, “The letter was opened and read by various individuals, including people in the legal department, before it found its way to Evon.”

According to attorney Sergei Lemberg, whose firm Lemberg & Associates represents Ms. Evon, “The appellate court’s decision is a resounding victory for consumers. All too often, debt collectors use tactics of embarrassment or humiliation to extract payments from people. This ruling establishes that sending correspondence to a person’s place of employment is a violation of the law.”

The court acknowledged that, while sending a debt collection letter to a consumer’s workplace without consent is a violation of the Fair Debt Collection Practices Act (FDCPA), “The trickier question is whether sending a letter addressed to the debtor but using the debtor’s employer’s address constitutes a violation.” Although the district court judge was adamant that the FDCPA doesn’t explicitly prohibit sending correspondence to an employer, the appellate court cited a U.S. Senate report predating the 1968 enactment of the FDCPA that explicitly stated, “Collection abuse takes many forms, including…disclosing a consumer’s personal affairs to friends, neighbors, or an employer…” Moreover, the appellate court noted that “the FDCPA is a remedial statute which should be interpreted ‘liberally.’” The court opined, “Even if Mickell assumed that some debtors receive mail at their place of employment, it is not reasonable for Mickell to assume that all debtors’ mail so received remains unopened and unseen before reaching the debtor. As a lawyer in the business of debt collecting, Mickell should have known of the real possibility that a letter to a debtor’s place of employment, even one marked “Personal and Confidential,” would be viewed by someone other than the debtor.”

In the same opinion, the appellate court reversed the district court’s denial of Evon’s class certification motion on that issue, calling the district court’s concern about whether or not consumers consented to having letters sent to their workplaces “a red herring.” Going further, the opinion noted, “…there is nothing in the record that supports the district judge’s conclusion that Sergei Lemberg was not qualified to represent the class.” The appellate court further opined, “The FDCPA is a consumer protection statute and was intended to permit, even encourage, attorneys like Lemberg to act as private attorney generals to pursue FDCPA claims. Moreover, plaintiffs have already benefitted and will continue to benefit from this case.”

In addition, the appellate court granted Evon’s request to reassign the case to a different district court judge, noting that while honoring such requests demand “unusual circumstances” that “rarely exist,” “the record reflects an unfortunate dismissive attitude by the district judge both toward Lemberg and the class Evon seeks to represent.”

Lemberg concluded, “We are pleased that the Court of Appeals ruled in our client’s favor, and that the Court clarified that debt collectors who send letters to consumers at their workplaces are in violation of the law. We also appreciate the court’s recognition that consumer attorneys play an important role in holding debt collectors accountable. Finally, we welcome the opportunity to seek class certification for the more than 250 people who received similar letters from the Law Offices of Sidney Mickell at their workplaces.”

This release references Evon v. Law Offices of Sidney Mickell (U.S. Court of Appeals for the Ninth Circuit, 310-16615, D.C. No. 2:09-cv-00760-JAM-KJN).

Lemberg & Associates Files ATM Class Action; Congress Moves to Change Law

Thursday, July 12th, 2012 at 8:33 pm  
Leave your comment

On behalf of a client and others who experienced the same issue, Lemberg & Associates filed a class action complaint in U.S. District Court, District of Connecticut against Cardtronics, Inc. and Dunkin’ Brands, Inc. The lawsuit alleges that the defendants repeatedly violated the Electronic Funds Transfer Act (EFTA) and related regulations. The EFTA requires that those who charge consumers a fee for using what are called “host transfer services” provide consumers with a notice informing them of the fee and the amount being charged. According to the law, the notice must “be posted in a prominent and conspicuous location on or at the automated teller machine at which the electronic fund transfer is initiated by the consumer.” Lemberg & Associates’ client used an ATM inside a Dunkin’ Donuts, but the fee notice was placed below knee level – which the suit argues is neither a prominent nor conspicuous location, and is thus a violation of the law. Because many other consumers have used the same ATM inside the same Dunkin’ Donuts, it is logical to assume that other consumers have also been charged an ATM fee without proper notice; hence taking the route of a class action.

In related news, the Washington Times reports that Congress is moving to amend the Electronic Funds Transfer Act to remove the requirement that a physical sign or placard be posted on ATMs charging fees; instead, only that a digital message displayed on the ATM screen would be required. The House of Representatives unanimously approved the legislation, and the Senate is expected to take action shortly.

Among those opposing the legislation are Consumer Action, Consumers Union, and U.S. PIRG. Sergei Lemberg added his voice to the opposition, saying, “Transparency in financial transactions is critical in protecting consumers from the insidious hidden fees propagated by those in the financial services industry. Relaxing disclosure requirements could easily have a cascading effect, causing unsuspecting consumers to incur fees that could push them over the financial brink.” Urging U.S. Senators to vote against the measure, Lemberg continued, “Ever wonder why banks are putting the notice on the side of the machines or at ankle height? It’s because people would be less likely to insert the card into the machine if they knew what it cost.”

AllianceOne Settles in TCPA Class Action

Tuesday, May 29th, 2012 at 6:06 pm  
Leave your comment

AllianceOne Receivables Management has agreed to settle a class action lawsuit alleging that the debt collector violated the Telephone Consumer Protection Act by calling cell phones using an automated dialer (robocalls) or with a prerecorded voice message without first getting the recipients’ consent.

According to a press release issued by the attorney in the case, AllianceOne denies any wrongdoing but agreed to settle the case rather than engage in protracted litigation. The settlement, which will have to be approved by the court, requires AllianceOne to pay $9 million into a settlement fund.

Consumers eligible for the settlement are those who received an AllianceOne robocall on their cell phones or pagers without their prior consent between February 9, 2004 and November 30, 2010. Claims can be filed at http://www.allianceonesettlement.com/.

Complaint Filed in Class Action for Alleged Violations of the Servicemembers Civil Relief Act

Monday, November 28th, 2011 at 10:24 am  
Leave your comment

We filed a class action complaint on behalf of Sgt. Charles Beard and other servicemembers, and issued this press release last week:

Attorneys for plaintiff Sergeant Charles Beard have filed a class action complaint that alleges that Satander Consumer USA and Triad Financial Corporation illegally and routinely repossess automobiles belonging to active duty U.S. military personnel without first obtaining a court order, in violation of the Servicemembers Civil Relief Act (SCRA). The complaint, filed in U.S. District Court, Eastern District of California, also alleges that the defendants fail to reduce the applicable interest rate to six percent for any servicemember who provides them with notification under Section 527 of the SCRA. According to Sgt. Beard’s attorney, Sergei Lemberg, “While our sailors, airmen, and Marines are exhibiting unparalleled patriotism and sacrificing so much, unscrupulous companies are stealing their cars. Violating the SCRA is simply unpatriotic.”

Sgt. Beard, who is in the Army National Guard, purchased a Kia Sportage in September 2007 and began making payments to Triad Financial. In August 2008, Sgt. Beard was ordered to active duty and was deployed abroad. The suit alleges that the defendants repossessed Sgt. Beard’s Sportage in February 2009, despite his wife telling them that her husband was on active duty and that a court order was required to repossess the car. A representative of the defendants allegedly told Mrs. Beard that she would go to jail for a stolen car if she did not return the vehicle. Although an Army legal assistance attorney advised the defendants that Sgt. Beard was protected under the SCRA, the suit alleges that they nonetheless sold his Sportage at auction, and kept both the auction proceeds and Sgt. Beard’s payments.

According to the court filing, the defendants’ repossession of Sgt. Beard’s vehicle in violation of the SCRA is typical, and therefore qualifies for class action status. It notes that, after reviewing many jurisdictions heavily populated by military personnel, it was found that the defendants routinely fail to determine whether a delinquent borrower is in the military or on active duty. It says, “Defendants routinely ignore servicemembers’ rights under the SCRA and wrongfully repossess their cars without obtaining the required court orders.” Moreover, the court filing notes that the defendants routinely charge more than the six percent interest rate allowed by the SCRA.

Since September 11, 2001, more than one million courageous men and women have stepped forward to defend the U.S. and its founding principles through their military service. Our nation has witnessed the focus and determination of our brave men and women in uniform – a commitment that has cost many their limbs and others their lives. Serving in approximately 150 countries around the globe, U.S. servicemembers make sacrifices on a daily basis. Says Lemberg, “The very lives of our men and women in uniform depend upon their ability to focus on the job at hand. The SCRA is meant to ensure that they aren’t distracted by matters back home.”

Lemberg notes that those in the military sacrifice tremendously for our country in the name of freedom. The case filing says, “It is against equity and good conscience to permit [the] defendants to retain the ill-gotten proceeds of the vehicle’s repossession and sale and from charging illegal rates of interest.” Lemberg concludes, “We will fight on Sgt. Beard’s behalf – and servicemembers like him – to see that the defendants are brought to justice.”

This release references Beard v. Santander Consumer USA, Inc. and Triad Financial Corporation (U.S. District Court, Eastern District of California, Fresno Division, 1:11-cv-01815-LJO-BAM).

U.S. District Court Grants Class Certification in Debt Collection Case Against Portfolio Recovery

Wednesday, September 21st, 2011 at 12:17 pm  
Leave your comment

We reached a milestone in Zimmerman v. Portfolio Recovery Associates, namely that the U.S. District Court granted our motions for summary judgment and class certification. We issued the following press release yesterday:

SEPTEMBER 20, 2011 – STAMFORD, CT – The U.S. District Court for the Southern District of New York has granted the plaintiff’s motions for summary judgment and class certification in Zimmerman v. Portfolio Recovery Associates, LLC. According to Jason Zimmerman’s attorney, Sergei Lemberg, “We are pleased that the Court ruled in our favor, granting summary judgment in favor of 990 consumers victimized by Portfolio Recovery Associates.”

The facts of the case revolve around a debt collection “Pre-Suit Package” that was sent under Portfolio Recovery Associates “Litigation Department” letterhead and included a cover letter, as well as documents that appeared to be a “lawsuit,” including a “Summons” and a “Complaint” that referenced the District Court of the County of Nassau, First District, and listed Zimmerman as the defendant. The cover letter said, in part, “Enclosed please find a copy of the lawsuit our local counsel in your state intends to file against you related to the delinquent account referenced above.” However, a closer examination of the papers revealed that the Pre-Suit Package did not contain actual legal papers, but rather were simulated legal papers made to look real.

The Court found that Portfolio Recovery Associates violated provisions of the Fair Debt Collection Practices Act (FDCPA) relating to “[t]he use or distribution of any written communication which simulates or is falsely represented to be a document authorized, issued, or approved by any court…of the United States…, or which creates a false impression as to its source, authorization, or approval,” or which constitutes “[t]he false representation or implication that documents are legal process. ” The Court’s opinion stated, “The ‘least sophisticated consumer’ might well conclude that Defendant had initiated a lawsuit to collect the debt, given the form of the Summons and Complaint, the reference to the court and parties…and the fact that an attorney from Portfolio’s “Litigation Department” had signed the cover letter.

Lemberg said, “The law unequivocally prohibits debt collection agencies from sending official-looking documents that lead consumers to believe that they are being sued; it is quite surprising that the practice persists.” Noting that it would be cumbersome for the 990 consumers affected by Portfolio Recovery Associates’ “Pre-Suit Package” to individually pursue actions against the debt collector, Lemberg applauded the Court’s decision to grant class certification. “We look forward to obtaining money for all of the consumers who were impacted by PRA’s actions.”

This release references Zimmerman v. Portfolio Recovery Associates, LLC (U.S. District Court, Southern District of New York, 1:09-cv-04602-PGG).

Collecto Class Action Moves Forward

Wednesday, September 14th, 2011 at 3:50 pm  
Leave your comment

The U.S. District Court, Eastern District of New York has denied the defendant’s motion to compel arbitration in our class action suit, Butto and Houser v. Collecto (10-cv-2906 (ADS)(AKT)).

The suit alleges that Collecto (collecting a Verizon Wireless debt in the case of Ms. Butto, and collecting an AT&T Mobility debt in the case of Ms. Houser) violated the Fair Debt Collection Practices Act and New York’s consumer protection statute. The suit alleges that Collectco sent both women debt collection letters that added 18% in collection fees to the amounts owed. The suit alleges that Collecto had made arrangements with Verizon and AT&T that they would receive their payments when Collecto had successfully collected on the debts. Because no monies had been recovered at the time Collecto sent the letters, it was not entitled to its collection fees. The suit alleges that Collecto therefore misled Ms. Butto and Ms. Houser by creating a false impression that they incurred collection fees and owed that money.

If you had a contract with AT&T Mobility or Verizon Wireless, and received a debt collection letter from Collecto, please call our office toll-free at 855-301-2100.

To learn more about the case, or to download the pleadings and decisions, please visit the Lemberg & Associates website.

Rozier v. Financial Recovery Class Action Moves Forward

Wednesday, June 8th, 2011 at 1:16 pm  
Comments (1)

justiceYesterday, U.S. District Court (Eastern District of New York) Judge Dora Irizarry ruled against Financial Recovery Systems in their motion to dismiss the pending class action lawsuit, Rozier v. Financial Recovery Systems. The case can therefore move forward.

The class action suit revolves around a letter received by William Rozier (and, presumably, a number of other consumers) that stated in part:

As of the date of this letter, you owe $2397.23. Interest, late charges, and other charges may or may not be applicable to this account. If some or all of these are applicable, they may vary from day to day and thus the amount due on the day you pay may be greater. Hence, if you pay the amount shown above, an adjustment may be necessary after we receive your check, in which even we will inform you before depositing the check for collection. For further information, write the undersigned or call .

Our case asserts that the letter violates the Fair Debt Collection Practices Act by falsely representing the “character, amount or legal status of any debt.” We also assert that Financial Recovery Systems violated New York General Business Law that prohibits misleading consumers.

In her decision, Judge Irizarry noted, “…the language at issue in the collection letter makes it unclear to any consumer, sophisticated or not, the amount of debt due including what, if any, additional charges will apply to the amount stated in the collection letter.” She went on to say that the notice strayed from the “safe harbor” language found in the Seventh Circuit’s decision in Miller v. McCalla, and that the court respectfully disagreed with another court’s decision in Brill v. Financial Recovery Services.

Needless to say, we’re thrilled with the decision and look forward to the next phase of the class action.

 Page 1 of 2  1  2 »