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Firms Reach $4 Million Settlement in Class-Action FDCPA Suit

A number of ARM industry companies have reached a $3.9 million settlement in a class-action case filed against them after they were accused of improperly obtaining default judgments on unpaid wireless phone debts.

A final approval and fairness hearing for the settlement has been set for April 10. A copy of the preliminary order approving the settlement in the case of Mayfield, Millien, Porter et al. v. Asta Funding, Palisades Collection, Pressler & Pressler et al. can be downloaded here. A copy of the original complaint can be downloaded here. The case was filed nearly four years ago.

According to the original complaint, Asta and Palisades began purchasing defaulted wireless debts from AT&T. The sale of the debts did not include copies of the original signed contracts or account terms and conditions. The debts were subsequently placed with Pressler & Pressler, which filed lawsuits against the individuals. Between 2005 and 2007, Palisades was a plaintiff in 132,000 cases in New York City, and was represented by Pressler in nearly half of them. The complaint accused Pressler of not engaging in a meaningful review of a case before deciding to file suit, and using fraudulent service affidavits to secure default judgments.

The complaint noted that less than 10% of individuals sued by Palisades showed up in court for their hearings.

The default judgments were used to seize assets and garnish wages of those individuals with unpaid debts.

The defendants filed their motion approving the settlement on Thursday. The named plaintiffs will receive $1,000 each. The plaintiffs’ attorneys will receive $787,500.

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