By Hunter Stuart
A federal watchdog is suing a collection agency that allegedly operated like a “factory” churning out lawsuits against cash-strapped borrowers, often using misleading, deceptive and illegal practices.
The suit is the latest effort by regulators to crack down on debt collection abuse. The billion-dollar industry has ballooned in size over the past two decades and is under fire for filing wrongful lawsuits against vulnerable borrowers.
The Consumer Financial Protection Bureau (CFPB) announced on Monday that it had sued Frederick J. Hanna & Associates, a Georgia-based law firm that sues consumers for old, outstanding debts owed to banks, debt buyers and credit card companies.
The complaint against Hanna & Associates alleges that the firm operated as a lawsuit “factory,” cranking out more than 350,000 suits in Georgia alone since 2009. What’s more, the company operates with a skeleton staff of eight to 16 lawyers who merely put their signature on lawsuits, while the bulk of the work at the firm is performed by “automated processes” and non-attorney staff, according to the CFPB complaint.
Read More Debt Collection ‘Factory’ Preyed On Broke Americans: Lawsuit.