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Action against Pressler and Pressler for FDCPA Violations

What is a reasonable amount of time for an attorney to review a case prior to instituting litigation?

That question is the crux of the ongoing case of Bock v Pressler & Pressler LLP. As it currently stands, the case has entered the U.S. Third Circuit Court of Appeals. After a previous ruling stated that Pressler and Pressler failed to meet some of the requirements of the Fair Debt Collection Practices Act (FDCPA) by “filing a complaint without meaningful attorney involvement”. In an effort to solidify the original judgement, the Consumer Financial Protection Bureau (CFPB) teamed up with the Federal Trade Commission (FTC) to file an amicus brief with their opinions on the actions by Pressler that they deem to be improper.

What are the facts of the case?

The Plaintiff, Daniel Bock, incurred a credit card debt of $8,021.57 with HSBC Bank. The debt was subsequently purchased by Midland Funding LLC, a company that is in the business of buying debts. In an effort to collect the debt, Midland Funding hired the law firm of Pressler & Pressler LLP to engage Bock.

Pressler promptly issued a collection letter to Bock. The letter included a disclosure stating that as of that time, no attorney had reviewed the account. Bock ignored the letter and did not make any payments to Midland. In turn, on Midland's behalf, Pressler filed a collection lawsuit in Supreme court. The complaint was “reviewed, read and signed” by an attorney, Ralph Gulko.

Bock and Midland came to a settlement agreement of $3000. Prior to settling the debt Bock requested that Pressler provide evidence of his debt. In further review of the collection action filed by Gulko, suspicious activity came to light. In signing the collection complaint with the court Gulko had declared that the complaint was reviewed and read to the best of his abilities. After a quick review of the Pressler complaint review process it became clear that was not possible.

Pressler used a very streamlined automated process in which they first take in the debt through an automated computer system which scrubs the data to make sure it is complete and retains any and all essential data about the debt. The data is then reviewed by trained non-attorney personnel. After review, the data is sent to a computer system which performs a background check on the Debtor to determine whether the debtor is still alive, where they live, and to check if the debt has exceeded its statute of limitations.

A second in-house data scrub is conducted to review all information to this point. If at this point the complaint still exists, the information is reviewed for a second time by a non-attorney who will proceed to send a collection letter to the debtor. Then, Presser will put the debt on a 30 day wait period. If there is no response after 30 days a team of non-attorneys will again review the debt if satisfied they will generate a summons and complaint. Then an electric version of the complaint is sent to the attorney at Pressler, Ralph Gulko, to be read reviewed and signed.

This all may seem fine at first impression. However, in a given day Gulko will review anywhere between 300 and 1000 files, which means that, in a 8 hour work day, at most Gulko is giving each case between 30 and 130 seconds each. It is hard to believe that reasonable review could be conducted in that time frame. As such Bock brought Presser back to court stating that they violated the FDCPA for filing a complaint without meaningful attorney involvement.

According to the computer records Gulko looked at Bock’s case for a total of 4 seconds. The court stated that their action was not considered a "reasonable effort" and after further inquiry the courts also found that no member of Presser’s staff had knowledge of Bock’s original contract or that any of the Contract’s listed dispute resolution information.

CFPB and FTC Amicus Brief

After receiving the court's original judgement, Presser elected to file an appeal with the U.S. Third Circuit Court of Appeals. In immediate response the CFPB and the FTC approached the court as Amici Curiae (friend of the court).

An amicus curiae is an unaffected third party who while not a party to the case brings forth information relevant to case without being solicited by either of the parties in the lawsuit, acting only to offer assistance to the court. After petitioning the court as amici curiae, the CFPB and FTC were granted permission to file an amicus brief to give their professional opinion on the case facts.

According to multiple online sources their joint amicus brief the CFPB and FTC declared “Under any conceivable standard, four seconds is not enough to become meaningfully involved and form a professional judgment about the appropriate action to take. For that reason, Pressler’s representation that an attorney had done so was deceptive and violated the FDCPA.” This stance reaffirms the original courts decision. Additionally the brief drafts out their interpretation of what they consider to be meaningful attorney interaction under the FDCPA.

While it is too soon to tell, it would appear that the case of Bock v. Pressler and Pressler, LLP may soon become somewhat of a landmark case with regards to the subject matter of “meaningful attorney involvement”. We are currently at a time where legal procedure is becoming more streamlined due to advances in technology, and clarification is needed from the courts.

Generally, courts are supportive of newer and faster pace legal processes, and try not to stifle attorneys to the ways of old. However, as these new methods surface, the courts have to insure that the new methods continue to adhere to a certain standard to ensure that no parties are prejudiced by the new processes. This case may be the first in a long line of “meaningful attorney involvement" cases that may continue to arise in the years to come.