Regulation

CFPB files suit against Georgia-based debt collection “mill”

CFPB_LogoThe CFPB filed a suit on Tuesday against a Georgia-based debt collection firm that allegedly used illegal tactics to intimidate consumers into paying debts not owed.

Frederick J. Hanna and Associates, as well as its three principal partners, initiated hundreds of thousands of lawsuits against consumers based on allegedly deceptive court filings and unsubstantiated evidence, the CFPB said in a statement.

“The Hanna firm relies on deception and faulty evidence to drag consumers to court and collect millions,” CFPB Director Richard Cordray said. “We believe they are taking advantage of consumers’ lack of legal expertise to intimidate them into paying debts they may not even owe. Today we are taking action to put a stop to these illegal debt collection practices.”

The CFPB alleges that between 2009 and 2013, the firm filed more than 350,000 debt collection actions in the state of Georgia and allegedly collected millions each year from the lawsuits.

Violations alleged in the complaint include deceptive court filings and faulty or unsubstantiated evidence, including sworn statements from clients. The CFPB is seeking to put an end to the practices and to impose penalties on the company and its partners for their alleged conduct.

Additionally, the CFPB has requested that the defendants be ordered to compensate consumers who were allegedly harmed through their actions.

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