FOR IMMEDIATE RELEASE:
January 11, 2023
CONTACT:
Office of Public Affairs
press@cfpb.gov
CFPB Takes Action to Halt Debt Collection Mill From Bombarding Consumers with Junk Lawsuits
Forster & Garbus illegally sued borrowers on behalf of Citibank and Discover, among others
WASHINGTON, D.C. — The Consumer Financial Protection Bureau (CFPB) has reached a settlement in its lawsuit against law firm Forster & Garbus, LLP for illegal debt-collection practices. If approved by the court, the proposed settlement would prohibit Forster & Garbus from filing any new lawsuit against a consumer unless it has specific documents supporting the debt and certifies that an attorney reviewed those documents. The order would also require the company to dismiss any pending lawsuit where it cannot satisfy these requirements. Forster & Garbus would also be required to pay a penalty of $100,000, which would be deposited into the CFPB’s victims relief fund.
“Forster & Garbus bombarded its customers with sketchy lawsuits on behalf of big lenders like Discover and Citibank,” said CFPB Director Rohit Chopra. “The CFPB will be scrutinizing large financial companies that enlist debt collection outfits operating lawsuit mills.”
Forster & Garbus, LLP is a debt-collection law firm based in Commack, New York. Forster & Garbus had major clients including Discover and Citibank. Between 2014 and 2016, at any given time, Forster & Garbus employed roughly 10 or 11 attorneys, in addition to its two named partners. From January 1, 2014 to the filing of the complaint, Forster & Garbus’s clients placed more than 136,700 accounts with the firm for collection.
In 2019, the CFPB sued Forster & Garbus alleging that, from 2014 through 2016, fewer than a dozen attorneys at Forster & Garbus filed more than 99,000 debt-collection lawsuits, while having documents to support only a fraction of those debts. The CFPB further alleges that Forster & Garbus falsely represented to consumers that attorneys were meaningfully involved in preparing and filing the lawsuits, violating the Fair Debt Collection Practices Act’s (FDCPA) prohibition against collecting debts by using false, deceptive, or misleading representations and the Consumer Financial Protection Act’s (CFPA) prohibition against deceptive acts and practices.
Enforcement Action
Under the CFPA, the CFPB has the authority to take action against institutions violating consumer financial laws, including the FDCPA, which addresses unlawful debt collection practices. The CFPA prohibits engaging in unfair, deceptive, or abusive acts or practices.
If entered by the court, the order would require Forster & Garbus to:
- Retain specific documents supporting the debt before filing a debt-collection lawsuit: Forster & Garbus would be required to possess documents with specific information about the debt, including the name of the original creditor, evidence that the consumer authorized the debt, the chain of title supporting any sale of the debt, and a break-down of how the debt amount was calculated.
- Review documents supporting the debt before filing a debt-collection lawsuit: Foster & Garbus would be required to certify that an attorney whose name will appear on the complaint has reviewed the documentation supporting the debt and ensured that the complaint is consistent with that documentation.
- Dismiss certain debt-collection lawsuits: Forster & Garbus would be required to dismiss any pending lawsuit against a consumer if it does not certify its compliance with the specified documentation and meaningful attorney review requirements within 120 days of the court entering the order.
- Pay $100,000 in penalties: The order would require Forster & Garbus to pay a $100,000 penalty to the CFPB, which would be deposited into the CFPB’s victims relief fund.
Consumers can submit complaints about financial products or services by visiting the CFPB’s website or by calling (855) 411-CFPB (2372).
Employees of companies who they believe their company has violated federal consumer financial laws are encouraged to send information about what they know to whistleblower@cfpb.gov.
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The Consumer Financial Protection Bureau is a 21st century agency that implements and enforces Federal consumer financial law and ensures that markets for consumer financial products are fair, transparent, and competitive. For more information, visit consumerfinance.gov.
Filed under: foreclosure |
If you get even that Usedkarguy – and how far back are they going? To Charles Reed – you are correct. We also used to be able to go to state AG. Now, any complaint goes to CFPB. This is how the CFPB was created. I agree about the OCC. They would negate help if in litigation. But they would investigate. With CFPB you just get “filed.” And if you try another complaint, they will tell you it is a “duplicate” and close the complaint.
Wells Fargo is apparently going on a case-by-case basis.
They gave a ton more towards auto loan claimants than foreclosure claimants. We’ll all get checks for $1100 again.
https://www.consumerfinance.gov/about-us/newsroom/cfpb-orders-wells-fargo-to-pay-37-billion-for-widespread-mismanagement-of-auto-loans-mortgages-and-deposit-accounts/
Hi all. If anyone is still here, I just called Wells Fargo.
They’re distributing $200 Million to homeowners.
What I just found is that it does no good to contract the CFPB if you wanting individual help as you have to wait for something like this last Dec 20, 2022 CFPB Consent Order and 16 million victims later and they want to give victims some chump change while the agency gets a couple of trillion dollars.
What mess up about this is the OCC before the CFPB would investigate the individual consumer complaint but it handed over complaint to the CFPB that who does not do the same thing that the OCC once did.
Now all you can do is hope your in the settlement group because they will not handle anything individually!