Law Firm Sued in Debt-Collection Class Action Claims Negative Net Worth
The federal Fair Debt Collection Practices Act has been a pitfall for unwary law firms sued on a variety of theories. But Wolpoff & Abramson may have been particularly unlucky in this regard.
Under Connecticut law, debt collectors are required to register with the state’s Department of Banking, although the registration requirement doesn’t apply to law firms in the state that do debt-collection work. However, the Wolpoff firm has been sued under the FDCPA for allegedly violating the registration rule by continuing to do collection work from its offices in Maryland after its Connecticut outpost closed in 2007, reports the Connecticut Law Tribune.
In March, Senior U.S. District Judge Charles Haight Jr. granted class certification in the federal case, which was filed against the law firm in New Haven, Conn., by retiree Jeanne Lemire. She allegedly was harassed by creditors after her identity was stolen and credit was fraudulently obtained in her name.
Attorney Daniel Blinn of the Consumer Law Group in Rocky Hill is representing the plaintiffs. They are seeking damages—which could be as much as $500,000 or 1 percent of the defendant’s net worth, whichever is less, under the FDCPA—and legal fees.
Wolpoff & Abramson is challenging the constitutionality of the Connecticut Consumer Collection Agencies Act, which contains the registration requirement, and says a third party hired to obtain proper licensing failed to do so, the Law Tribune reports. The firm also contends that it has a negative net worth.
Similar debt-collector registration requirements apply in about half the states in the country, the legal publication notes.
