CFPB Proposes $3 Million Fine For Law Firm

The Consumer Financial Protection Bureau has filed a proposed consent order that would bring an end to one of the strangest debt collection cases on record. The order, against Frederick J. Hanna & Associates, would end a legal battle that has waged between the Georgia-based law firm and federal regulator for more than a year.

The order proposed today would require the firm to pay a $3.1 million fine for allegedly relying on “deceptive court filings and faulty evidence to churn” out lawsuits, according to the CFPB. The CFPB initially filed a lawsuit against the firm in July 2014 for allegedly engaging in illegal debt collection activities, but the firm responded by filing a counter-suit against the CFPB. There was no mention in today’s announcement from the CFPB if the firm is accepting the terms of this order.

Among the claims made by the CFPB against the firm were: intimidating consumers with deceptive court filings by filing collection suits against consumers allegedly signed by attorneys when there was no meaningful involvement by lawyers, and including sworn statements and attestations that those signing the documents could have had no knowledge about what they were signing.

One attorney at the firm, according to the CFPB, filed 130,000 lawsuits against delinquent and defaulted debtors during a two-year span.

Click here for a copy of the proposed consent order.

Click here for a copy of the CFPB’s original complaint.


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