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Forster & Garbus LLP Settles Allegations Of Illegal Debt-Collection Practices

A debt collection firm that filed more than one hundred thousand lawsuits against borrowers has been sued and faces a fine from a federal agency in charge of protecting consumers' rights. Forster & Garbus LLP has agreed to settle the case brought by the Consumer Financial Protection Bureau (CFPB) that alleged illegal debt-collection practices.

If you've been sued by Forster & Garbus LLP, please contact us for assistance. Law Office of Simon Goldenberg, PLLC is an experienced consumer protection law firm with experience protecting the rights of debtors against unfair and abusive collection actions.

Wrongful Collection Practices Lawsuit

The debt-collection firm Forster & Garbus, LLP (F&G), based in Commack, New York, represented large corporate clients like Discover and Citibank. The federal lawsuit revealed that F & G had 10 or 11 attorneys on staff, along with its two named partners, and that this group of about a dozen attorneys filed over 99,000 debt-collection lawsuits from 2014 through 2016. The case also alleges that F & G didn't have the legal documents to support all the debts they sued on. Both practices violated applicable federal consumer debtor protection regulations.

Federal rules, including the Fair Debt Collection Practices Act (FDCPA), prohibit using false, deceptive, or misleading representations in attempting to collect debts. Similar rules forbid deceptive acts and practices in the Consumer Financial Protection Act (CFPA). Despite these federal protections for consumers, the debt-collection lawsuit mill F & G allegedly falsely claimed that there was meaningful involvement of attorneys in preparing and filing the tens of thousands of court actions. It was apparent, though, from the scale of lawsuits the firm was bringing, that they didn't all have the attorney oversight and proper documentation to support the debt collection actions in court as required by federal laws.

Legal Grounds For Action

The CFPA prohibits unfair, deceptive, or abusive practices in debt collection, and it authorizes the CFPB to enforce federal consumer financial laws such as the FDCPA and its rules against unlawful debt collection activity. The CFPA filed suit against Forster & Garbus to enforce the federal laws in federal court. The two sides have agreed on a proposed settlement of the lawsuit, which will involve substantial changes to how F & G handles cases against borrowers.

Lawsuit Settlement

The proposed settlement to the lawsuit, if approved by the court, will require that F & G take actions to remedy their alleged unlawful practices with the following remedial actions:

  • Following a strict policy of having certain required documents that support the debt before bringing any debt-collection legal action: F & G must have legal documents with information about the debt that includes the name of the original creditor and evidence that the consumer approved the debt. They will also need to show the chain of title in which the debt was sold or transferred, as well as a statement of how the total amount of claimed debt was determined, including a specification of the original debt amount, interest, and claimed fees or penalties.
  • Reviewing all documents supporting a debt before filing a lawsuit for debt collection: For each complaint filed, F & G will have to certify that a specific attorney named in the legal documents has reviewed the supporting documentation and verified the facts stated in the complaint.
  • Dismissing wrongfully filed debt-collection actions: The agreement requires that F & G dismiss any lawsuits where the firm cannot certify compliance with the standards for documentation and attorney review within 120 days after the court enters the order.
  • Pay a $100,000 penalty: Foster & Garbus will pay a $100,000 fine to the CFPB. The money will go to the CFPB's victims' relief fund.

The terms of the proposed settlement will result in major changes in how F & G handles debt-collection lawsuits so they are in line with federal laws and regulations. Consumers benefit from this type of legal action that keeps large creditors' law firms like Forster & Garbus closely compliant with applicable federal consumer protection laws.

Know Your Consumer Rights

The FDCPA provides debt-collection rules designed to protect all consumers from unlawful and abusive collection practices. However, the rules and regulations are complex and often unclear to the consumers whom the laws are meant to protect. Law Office of Simon Goldenberg, PLLC, assists people in protecting their rights under the FDCPA and the CFPA.

If you have debts and you're pursued by Forster & Garbus or another creditors' law firm, contact us as soon as possible. We will review the details of your case and discuss your legal rights and options on how to resolve your debts. Federal laws and regulations offer protection from certain types of unlawful and abusive collection practices, but there are also legal defenses that we can raise against lawsuits claiming that you owe a creditor a lot of money.

Skilled Legal Counsel On Your Side

The stress and uncertainty of debt can weigh on your emotional well-being and interfere with all aspects of your family and professional life. At Law Office of Simon Goldenberg, PLLC, we've helped many consumers fight against harsh debt-collection actions. When you contact us for a free consultation, we can start to guide you on the path back to financial stability. If you've been sued by Forster & Garbus or another debt collection firm, contact us for assistance. Call (888) 301-0584 or contact us online.