Monique Sykes et al., Plaintiffs v. Mel Harris
and Associates, LLC, et al., Defendants, 09 Civ. 8486 (DC)
A Lawsuit That Dirty Debt Collectors Should Be Worried About
Federal Circuit Court Judge Denny Chin just issued an opinion in a consumer class action case that should send chills down the spines of debt collectors, perhaps including foreclosure-mill law firms and their process servers, nationwide.
Judge Chin decided that plaintiffs alleged enough information about the debt collectors in this case — a law firm, a process-serving company and a debt-buying company — to sue them for being a criminal enterprise under the Racketeer Influenced Corrupt Organization (RICO) law. Judge Chin also allowed claims under the Fair Debt Collection Practices Act.
Why should other companies in and related to the debt-collection business be so nervous?
Well, Monique Sykes and the other plaintiffs claim that the defendants’ business model is as follows:
- Buy debt with little documentation that the debt is accurate.
- File lawsuits claiming personal knowledge of the debt but using robo-signed affidavits instead.
- Deliberately fail to tell the “debtor” that the lawsuit is pending (a practice called “sewer service“).
- Get a “default” judgment against the debtor when she fails to show up in court to defend herself.
- Enforce the judgment, including by freezing the debtor’s bank account.
See full article from DailyFinance: http://srph.it/fIZLXj
Check out the full opinion below…