United States District Court Judge: Legal Counsel Is Liable Under FDCPA For False Representations of Their Clients in Court Filings

NJ firm Denbeaux & Denbeaux earns major victory using FDCPA for national consumers victimized by false information presented by law counsels at the bidding of their clients.

Westwood, NJ, January 5, 2016:   No longer can legal counsel evade liability under the Fair Debt Collection Practices Act (FDCPA) by claiming false information provided to a court or debtor was supplied by their client.  This is the conclusion of a groundbreaking judicial opinion according to Westwood, NJ financial consumer rights law firm Denbeaux & Denbeaux.

U.S. District Court Judge Jose Linares denied a debt collection law firm’s motion to dismiss in Steven Psaros vs Green Tree Servicing, LLC.  According to Judge Linares’ 16-page opinion, Psaros successfully alleged that New Jersey law firm Stern Lavinthal & Frankenberg violated FDCPA laws by charging and attempting to collect improper fees of $10,974.37 for property insurance outlays to Psaros’ home mortgage debt.  The fees were improper because Psaros had paid all taxes/insurance, and his mortgage loan contained an escrow waiver.  In response Psaros sued both Green Tree Servicing, LLC and Stern Lavinthal & Frankenburg.   Stern Lavinthal & Frankenburg argued that they were not liable for the false representations of the debt owed by Psaros because the false information was generated by their client Green Tree

Servicing, LLC.  Justice Linares rejected their defense, ruling that “Stem Lavinthal cannot evade its responsibilities as a debt collector by blaming its client for providing it with factually inaccurate information used in the process of collecting a debt.” Green Tree Servicing, LLC did not move for dismissal of the claims.

Judge Linares’ December 21 opinion is significant for Mr. Psaros and will prove meaningful to scores of other consumers facingdebt collection litigation.  It is unfortunate how often lawyers choosing to make a living collecting debts do so based-upon false information provided by their clients.  Green Tree Servicing, LLC was notified by Mr. Psaros of the error, and they still directed Stern Lavinthal & Frankenberg, LLC to collect funds not owed.  Industry wide, there is evidence that debt collectors and their attorneys regularly engage in this conduct unchecked.

The Court’s words are perfectly concise: ‘A plain reading of the statute leads to the conclusion that a violation has occurred,’” said Denbeaux & Denbeaux Partner Joshua Denbeaux.  “Systematic flaws in the state judicial process have resulted in an increased level of arrogance and greed among debt collectors as evidenced in this case.  It was not enough for the debt collection law firm and loan servicer to seek recovery of the debt owed, instead they inflated the sum by thousands of dollars and assumed with confidence they would get away without anyone noticing.  Had Mr. Psaros not been diligent to seek the assistance of an attorney, the collectors would have successfully stolen this money.”

Click here to read the entirety of Judge Linares’ decision.

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