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Thursday, April 19, 2018

AG HEALEY TO CONGRESS: DON’T GIVE LAWYERS A LICENSE TO USE ABUSIVE DEBT COLLECTION PRACTICES

AG HEALEY TO CONGRESS: DON’T GIVE LAWYERS A LICENSE TO USE ABUSIVE DEBT COLLECTION PRACTICES

BOSTON – Attorney General Maura Healey today led a bipartisan coalition of 20 state attorneys general urging Congress to oppose the so-called Practice of Law Technical Clarification Act of 2018, which would strip away protections against debt collection attorneys who use state courts to intimidate, harass and deceive consumers.

The letter states that, if enacted, the bill would amend the federal Fair Debt Collection Practices Act (FDCPA) to exempt law firms and licensed attorneys engaged in “litigation activities,” allowing them to engage in abusive practices. The amendment would also bar individuals from suing debt collection lawyers for damages and reasonable attorneys’ fees.  

            “This bill gives a free pass to predatory debt collection attorneys that harass our residents and manipulate our court system to threaten elderly and disabled people,” said AG Healey. “Congress should reject this bill.”

The attorneys general argue that “certain debt collection attorneys and law firms routinely misuse their access to the judicial system to take improper advantage of unsophisticated consumers.” These debt collectors’ use of litigation to collect debts disproportionally affects the most vulnerable consumers, who often lack the resources to hire lawyers, including the elderly, disabled and poor.  

State attorneys general and the Consumer Financial Protection Bureau have brought numerous actions against the practices of abusive debt collection law firms, which include falsely threatening to garnish the income and social security benefits of elderly and disabled consumers, threatening consumers with arrest and imprisonment for failure to pay debts, improperly suing consumers in courthouses miles from their homes, and filing lawsuits without meaningfully reviewing pleadings and without proof that consumers owe the debt at issue.

AG Healey’s Office regularly receives consumer complaints about debt collection abuses and has taken legal action against a number of debt collectors. In July 2017, the largest debt collection law firm in Massachusetts, Lustig, Glaser & Wilson, P.C., agreed to pay $1 million in restitution and significantly change their practices after AG Healey took action against them for widespread consumer abuses impacting thousands of Massachusetts consumers. That same month, the AG’s Office sued a Lowell debt collection attorney and was granted an injunction barring him from threatening consumers with arrest or imprisonment for nonpayment of small debts.
The AG’s Office is committed to combatting abusive debt collection practices. Consumers who have questions or concerns about such practices can call the Attorney General’s consumer hotline at 617-727-8400 or file a complaint with the office
Today’s letter comes in response to the House Financial Services Committee’s decision to vote the Practice of Law Technical Clarification Act out of committee.

Joining AG Healey in signing this letter today are attorneys general from California, Delaware, Hawaii, Iowa, Maine, Maryland, Michigan, Minnesota, Nebraska, New Jersey, New Mexico, New York, North Carolina, Pennsylvania, Rhode Island, Vermont, Virginia, Washington and Washington D.C.