WASHINGTON 7/16/14)--Frederick J. Hanna and Associates, along with its three principal partners, has been accused of operating a debt lawsuit mill using illegal tactics, resulting in a lawsuit against it filed by the Consumer Financial Protection Bureau Tuesday.
The CFPB alleges the Georgia-based firm used illegal tactics to intimidate consumers into paying debts they may not have owed, and that the firm churns out hundreds of thousands of lawsuits that frequently rely on deceptive court filings and faulty or unsubstantiated evidence.
"The Hanna firm relies on deception and faulty evidence to drag consumers to court and collect millions," said CFPB Director Richard Cordray. "We believe they are taking advantage of consumers' lack of legal expertise to intimidate them into paying debts they may not even owe. Today we are taking action to put a stop to these illegal debt collection practices."
Between 2009 and 2013, the firm filed more than 350,000 debt collection lawsuits in Georgia. The CFPB alleges the defendants collected millions of dollars each year through these lawsuits, often from consumers who may not actually have owed the debts.
Violations alleged in the CFPB's complaint include:
- Filing collection suits signed by attorneys when the lawsuits are the result of automated processes and the work of non-attorney staff, without any meaningful involvement of attorneys. The resulting lawsuits misrepresent to consumers that they are "from attorneys." This process allows the firm to generate and file hundreds of thousands of lawsuits. One attorney at the firm, for example, signed more than 130,000 debt collection lawsuits over a two-year period; and
- Using sworn statements from clients attesting to details about consumer debts to support its lawsuits. The firm files these statements with the court even though in some cases the signers could not possibly know the details they are attesting to. In a substantial number of cases, when challenged, the firm dismissed lawsuits. Since 2009, the firm has dismissed more than 40,000 suits in Georgia alone.
The Hanna firm focuses exclusively on debt collection litigation, and its three principal partners, Hanna, Joseph Cooling, and Robert Winter, play an active role in the company's business strategies and practices.
The CFPB is seeking compensation for victims, a civil fine, and an injunction against the company and its partners.
Use the resource link below for the full complaint.