Despite facing a lot of criticism and even some legal action that questions its constitutionality, the Consumer Financial Protection Bureau (CFPB) continues to march forward, and it is taking some businesses down in its wake. Recently, the CFPB ordered for a debt collection firm called Pressler & Pressler, LLP, along with New Century Financial Services, Inc. and two principal partners to cease and desist from cranking out deceptive/unfair debt collection lawsuits. It is alleged that these parties based the lawsuits on nonexistent/flimsy evidence. The order prevents the companies/individuals from any unlawful practices that could potentially intimidate or deceive American consumers. These types of actions could include things, like filing lawsuits without first finding out if the debts are legit. As a part of these orders, the partners must pay $1 million and New Century has to fork up $1.5 million.
Never at a loss for words, the CFPB Director Richard Cordray said, “For years, Pressler & Pressler churned out one lawsuit after another to collect debts for New Century that were not verified and might not exist. Debt collectors that file lawsuits with no regard for their validity break the law and violate the public trust. We will continue to take action to protect borrowers from abuse.”
New Jersey based Pressler & Pressler is a law firm that specializes in collecting debt for creditors by using lawsuits and other methods. New Century is also based in New Jersey, but this company purchases/collects default consumer loan debt and gives the accounts to Pressler & Pressler to collect on. It has been stated that Pressler & Pressler have filed hundreds of thousands of lawsuits against American consumers. Investigations have found that both partners – Gerard J. Felt and Sheldon H. Pressler participated in the debt collection litigations.
The CFPB discovered that Pressler & Pressler used an automated claim prep system, along with staff members who were not lawyers, in order to produce so many claims. The attorneys apparently only spent a minute or two at the most reviewing these cases. This allowed them to create thousands upon thousands of lawsuits seeking action against Pennsylvania, New York and New Jersey consumers. The CFPB stated that these actions were in direct violation of the Fair Debt Collections Practices Act and the Dodd Frank Wall Street Reform and Consumer Protection Act. These regulations prohibit deceptive and unfair acts in the consumer financial world.
The CFPB accused the parties of using false or empty allegations related to consumer debt actions. In other words, many lawsuits were filed without having a leg to stand on. They also filed lawsuits that were based solely upon false/unreliable information. Some consumers had challenged these cases in the past, but the firm would not review any information in order to validate the claims. Worst of all, it seems that these folks were harassing people with unsubstantiated filings in court. Their automated system made it easy and quick for the firm to go after as many people as it wanted to, and that appears to be exactly what they did for some time.
Debt collection is a legitimate industry. However, when collectors, like Pressler & Pressler take it upon themselves to go outside of the laws and to outright harass people over debt collection cases, then things have gone too far. But it doesn’t look like consumers in New Jersey, New York, Philadelphia or anywhere else will have to worry about these shady collectors for quite some time, being as the firm has been hit with some pretty pricey fines and has been singled out to halt operations by the CFPB and the U.S. Court system.
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