Judge Indicates Class Certification Likely Even Though Defendants Settled Separately With BCFP

A federal judge in California indicated yesterday that he is likely to certify a class action lawsuit against a number of defendants for allegedly using false threats of imprisonment to coerce individuals into making payments, even though the defendant argues it has already paid a fine that was levied by the Bureau of Consumer Financial Protection.

Back in 2015, the BCFP assessed a $50,000 fine against National Corrective Group for “using deceptive threats of criminal prosecution and jail time in order to intimidate consumers into paying debts for bounced checks.”

The fine should be enough to either have the lawsuit dismissed or not certified as class action, lawyers for the defense argued yesterday, according to a published report. Comments from the judge in the case, however, make it appear as though he will move forward and certify the case as a class action.

“Their theory is that you wrongfully took money from the class members,” Judge Vince Chhabria said. “You’re saying ‘We should be able to keep that money because we already paid a fine to the CFPB.’”

In certifying the suit, Judge Chhabria said he would include individuals who received letters from the defendants prior to the date when the settlement with the BCFP was reached. As part of the settlement, the defendants agreed to stop sending letters using the letterheads of District Attorneys when communicating with consumers. That “significant” change is enough to keep people who received letters after the settlement from being part of the suit, the judge said.

The defendants in the case are Victim Services Inc., National Corrective Group Inc., American Justice Solutions Inc. and Birch Grove Holdings Inc., collectively doing business as CorrectiveServices. Matt Jonsson, CEO of National Corrective Group, and Karl Thomas Jonsson, principal shareholder and officer of Victim Services, are also named as defendants.