On July 27, 2017, the Massachusetts Attorney General’s Office (Massachusetts AG) announced that it entered into a consent judgment with the largest debt collection law firm in the state and two of its principals. The agreed consent judgment, which asserted violations of the Massachusetts Consumer Protection Act, G.L. chapter 93A, section 2, was entered in Suffolk County Superior Court. The lawsuit that formed the basis for the consent judgment was originally filed in 2015.
The Massachusetts AG alleged that the law firm filed tens of thousands of lawsuits per year based largely on unsubstantiated or inaccurate debts. The firm allegedly based its lawsuits on simple spreadsheets provided by national debt buyers. The Massachusetts AG also claimed that the firm filed false and misleading pleadings, demanded payment for time-barred or dismissed debts, and obtained payments from exempt income (such as social security). In total, the firm is alleged to have filed over 200,000 lawsuits in Massachusetts.
Under the terms of the consent judgment, the firm must pay $1 million to the Massachusetts AG for consumer restitution. The firm has also agreed to disclose to consumers that certain income is exempt from debt collection, obtain proof of debts before attempting collection, have all court filings meaningfully reviewed by an attorney, and stop using court processes to pressure consumers with no ability to pay.