Legal News

Court Certifies Consumer Class Fighting “Sewer Service” by Debt Buyers
Download PDF
1 Star2 Stars3 Stars4 Stars5 Stars (No Ratings Yet)
Loading...

Last week, a Manhattan federal court certified a class of consumers who are victim of “sewer service” tactics by debt buyers and collection agencies. The case has brought to the fore long-used abusive consumer debt-litigation tactics that prevent individuals from contesting their cases in court.

On 5th September, U.S. Circuit Judge Denny Chin certified a class of thousands of potential plaintiffs who had been sued in New York City civil court over unpaid debts and had default judgments entered against them. Plaintiffs in the lawsuit claimed that Leucadia National Corp, a company that purchases consumer debts, and the law firm of Mel S Harris Associates, which specializes in debt collection, uses methods to prevent defendants from contesting cases.

One of such methods includes “sewer service” or causing notices to be improperly delivered or never served at all. The judge said that the plaintiffs had provided “substantial support” to their claims against the law firm and the consumer-debt company.

  
What
Where


However, Brad Scher, an attorney representing Harris Associates, said, “It’s important to note that this decision in no way addresses the merits of the case, and has no bearing on liability, but simply allows the case to move forward as a class.”

Susan Shin, a staff attorney with the Neighborhood Economic Development Advocacy Project, which represented the plaintiffs, said that such “sewer service” tactics are being used by debt buyers for a long time.

Improper service of notices allows ex-parte decisions or default judgments against the debtors, and the creditor can seek to freeze the bank accounts of debtors or seek to garnish the defendant’s wages. Shin said it was an old method used by debt buyers “using the courts as an arm of their collection efforts.”

Get JD Journal in Your Mail

Subscribe to our FREE daily news alerts and get the latest updates on the most happening events in the legal, business, and celebrity world. You also get your daily dose of humor and entertainment!!




Carolyn Coffey, another attorney representing the plaintiffs noted that the same abusive tactics are also used in many unfair mortgage foreclosures.

The case would be moving forward as a class action on alleged violations of the Racketeer Influenced and Corrupt Organizations Act, the Fair Debt Collection Practices Act, and the New York General Business Law.



The case is Sykes v. Mel S Harris and Associates, U.S. District Court for the Southern District of New York, No. 09-8486.



 

RELEVANT JOBS

Law Clerk

USA-DC-Washington

C2 ALASKA, LLC Washington, DC   The Law Clerk II Journeyman- Division of Enforcem...

Apply now

Director of Administration

USA-VA-Arlington

Director of Administration (Communications/Litigation/Transactional Law Firm) Fletcher, Heald...

Apply now

Legal Executive Assistant

USA-VA-Arlington

Legal Executive Assistant (Communications/Copyright/Litigation)   Fletcher, Heald & Hi...

Apply now

Department Chairperson, Law Center

USA-FL-Miami

Miami Dade College, Wolfson Campus is now accepting applications for the Department Chairperson...

Apply now

BCG FEATURED JOB

Locations:

Keyword:



Search Now

Attorney

USA-FL-Jacksonville

Jacksonville office of a BCG Attorney Search Top Ranked Law Firm seeks an attorney with 4-20 years o...

Apply Now

General Liability Associate Attorney

USA-GA-Atlanta

Atlanta office of a BCG Attorney Search Top Ranked Law Firm seeks general liability associate attorn...

Apply Now

Wealth Planning Senior Associate/Of Counsel

USA-NV-Reno

Reno office of a BCG Attorney Search Top Ranked Law Firm seeks wealth planning senior associate/of c...

Apply Now

SEARCH IN ARCHIVE

To Top