NY Attorney General Going After Debt Collection Case Process Servers
The New York state attorney general will be suing a debt collection case court notification firm today, according to The New York Times. Officials say that debtors are not being properly notified of pending legal action.
New York Attorney General Andrew Cuomo will be filing a lawsuit today against one of the largest servers of debt collection legal action notices for failing to effectively notify debtors that legal action is pending against them, according to a media report.
The New York Times, citing unnamed officials in Cuomo’s office, reported Tuesday that the attorney general will file a civil suit against American Legal Process of Lynbrook, N.Y. Cuomo’s suit will allege that American Legal did not properly serve debtors with papers that would have apprised them of legal action.
Cuomo’s office has yet to confirm the suit and American Legal could not be reached.
The case, according to the paper, stems in part from a report issued by non-profit law firm MFY Legal Services. An MFY study found that one-third of debt collection lawsuits in New York City with values under $25,000 were filed by only seven different law firms. In those cases, less than 10 percent of defendants appeared in court. The most common result in the cases was a default judgment against the debtor.
Lawyers at MFY claim that it is in the best interest of creditors and debt collection law firms to make sure debtors do not receive notice of legal action. One lawyer told The Times that “sewer service” – simply discarding court notices with no attempt to deliver them to consumers – is a part of the business model of collection lawsuits.
It was immediately unclear what Cuomo’s office will be seeking from American Legal in the suit and what, if any, charges will be brought.
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Comments
Comment from Bill on April 14, 2009 at 11:02AM EST
We ought to hear the jingling of hand cuffs for those process servers participiating in sewer service.
There is no reason for unethical and illegal actions.
Comment from DONALD DALY on April 14, 2009 at 1:09PM EST
Go getum Andy. It is a shame that this industry constantly needs to be policed and corrected by outside authorities. The judges that O.K. the "NAIL & MAIL" lawsuits should be included also.
Comment from Dan'l on April 15, 2009 at 12:59PM EST
Assuming that American Legal Process is guilty as charged. But that hasn't been determined yet. As the story is written, MFY reports that most defendants of a particular debt range end up with default judgment, to match their defaulted payments. It is the opinion of one of MFY's lawyers that "sewer service" is a part of the business model of certain collection law firms. I don't see any evidence in the story to back that assertion. I wonder what the "MF" stands for?
Comment from rick hertzon on April 15, 2009 at 2:09PM EST
Having been in the collection business many years 90% of debtors served after first being advised they were being sued if they did not respond, still don't respond when sued and served, never show up in court and a default judgment is the result of the law suit. Let's protect the people that cause legitimate businesses to fail, just as in criminal cases the criminals seem to have all the rights or their cases either never get filed or even prosecuted even in murder cases. In the USA prosecutors are like "GODS", if they choose not to file then murderers walk. Not so in Europe. In most countries in Europe any citizen can file a criminal case without the approval of the Prosecutor. Something is wrong here. One doctor I know of had his license revoked in 4 different states and is still practicing medicine in California because of the way the state laws are so pathetically inept at to what they are trying to accomplish, ie Florida, California, New York, and Arizona for example they revoke a medical license, and immediately change it in the same order to probation. The doctor then moves to another state and gets licensed there. Those laws need to be changed to. We need a 3 strike law for doctors in this country just like some states have for criminals.
Comment from Anonymous on April 15, 2009 at 2:16PM EST
Small claim courts in other states such as Massachusetts "serve" the hearing notices on the debtors with similiar default judgment rates. Would MFY lawyers assert that the courts also have a business model to keep suits against debtors secret? MFY lawyers do a disservice to their profession when they speak half truths.