Judge Approves $2M Settlement in FDCPA Case

A debt collector in Oregon has agreed to pay $2 million to settle claims it violated the Fair Debt Collection Practices Act against a class of plaintiffs for charging an “issuance fee” of $45 when garnishing the assets of individuals with unpaid debts.

A copy of the approved settlement in the case of Russell v. Ray Klein, from Judge Michael McShane of the District Court for the District of Oregon, can be accessed by clicking here.

The class includes more than 10,000 individuals who had their wages or accounts garnished by the defendants between January 2018 and September 2019, when the original complaint was filed. The members of the class will each receive approximately $150, about three times the amount of the actual damages caused by the defendant’s issuance fees. Each of the named plaintiffs will receive $1,000. The plaintiff’s attorneys will receive 25% of the settlement amount, or $500,000.

The defendant admitted no wrongdoing as part of the settlement. While state law in Oregon allows collectors to charge fees that compensate for the expense of hiring attorneys, the attorneys in this case who issued the garnishment orders were in-house attorneys working for the defendant. The plaintiffs filed suit, alleging the fees were unlawfully collected in violation of the FDCPA, Oregon’s Unlawful Trade Practices Act, and Oregon’s Unlawful Debt Collection Practices Act.

Since the original complaint was filed, the case has gone through four amended complaints and mediation with two different judges, the final one of which produced the settlement.

The defendant filed motions to dismiss on a couple of different occasions during the course of this proceeding, both of which were denied by Judge McShane.

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