In a recent action, the Consumer Financial Protection Bureau ordered a debt collection law firm and two principal partners to stop filing deceptive lawsuits based on faulty or nonexistent evidence. Pressler & Pressler LLP and New Century Financial Services, Inc have been barred from illegal practices that may deceive or intimidate consumers. These actions include filing lawsuits based upon invalid claims. The named partners in the law firm have been ordered to pay $1 million in recovery and New Century has been ordered to pay $1.5 million to the CFPB’s Civil Penalty Fund.
Pressler & Pressler, LLP is a New Jersey based debt-collection law firm and is located at 7 Entin Road, Parsippany, New Jersey. The firm specializes in retail collections and represents debt buyers and other debt-collection companies such as J.P. Morgan Chase Bank and Midland Funding, LLC.
New Century Financial Services, Inc. is also based in New Jersey. The company buys and collects defaulted consumer debts including delinquent credit card accounts, loans, and auto deficiencies. New Century worked hand in hand with Pressler & Pressler and would send defaulted consumer accounts to the law firm for collection. Pressler & Pressler would then file a lawsuit on New Century’s behalf. The firm filed hundreds of thousands of lawsuits against consumers. Both partners actively participated in the firm’s debt collection litigation practices.
Pressler & Pressler use an automated claim-preparation system and non-attorney support staff to mass produce these lawsuits and determine which consumers to sue. Attorneys spend an insignificant time reviewing each case before initiating a lawsuit. This process allowed the firm to generate and file hundreds of thousands of lawsuits against consumers in New Jersey, New York, and Pennsylvania from 2009 to 2014. Pressler & Pressler and New Century Financial Services have been found to have violated the Fair Debt Collection Practices Act and the Dodd Frank Wall Street Reform and Consumer Protection Act. The violations include (1) making false or empty allegations about consumer debts; (2) filing lawsuits based on unreliable or false information; and (3) harassing consumers with unsubstantiated court filings.
The CFPB has ordered Pressler & Pressler and New Century Financial Services to stop filing lawsuits with unsubstantiated claims. Lawsuits may not be filed by either unless the information showing that the debt is accurate and enforceable is thoroughly reviewed and deemed to be true. Additionally, the firm, the named partners, and New Century must ensure accurate court filings and must pay civil penalties amounting to a total of $2.5 million.