CFPB sues New York firm over debt collection violations

The Consumer Financial Protection Bureau today filed a lawsuit in the federal district court in the Eastern District of New York against Forster & Garbus, LLP, a New York debt-collection law firm.

The Consumer Financial Protection Bureau today filed a lawsuit in the federal district court in the Eastern District of New York against Forster & Garbus, LLP, a New York debt-collection law firm.

Forster & Garbus, which contracts with such firms as Citibank and Discover among others, allegedly violated the Fair Debt Collection Practices Act by representing to consumers that attorneys were meaningfully involved in its lawsuits when, in fact, attorneys were not meaningfully involved in preparing or filing them, the bureau said. The law firm “relied on nonattorney support staff, automation, and both a cursory and deficient review of account files” to attempt to collect more than 99,000 debts, the bureau said in its complaint.

According to the complaint, Forster & Garbus filed collection suits on 45,621 accounts in 2014. A single associate attorney signed complaints for 41,498 of those accounts, in addition to handling other tasks, including frequent court appearances.

The following year, Forster & Garbus rotated four associate attorneys to serve as the primary signer of complaints at various periods during the year. That year, Forster & Garbus filed suit on 34,103 accounts, with two of the attorneys signing for 27,096 of them.

Finally, in 2016, Forster & Garbus filed collection suits on 20,006 accounts. A single associate attorney signed complaints for 18,173 of those accounts, in addition to handling other tasks, including frequent court appearances.

Forster & Garbus violated the Consumer Financial Protection Act’s prohibition against deceptive acts and practices by making such representations to consumers through its lawsuits, the bureau said.

The bureau’s complaint seeks an injunction against Forster & Garbus, as well as damages, redress to consumers, “disgorgement of ill-gotten gains”, and the imposition of a civil money penalty.