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Court Allows Class Action Accusing Collector, Law Firm of ‘Sewer Service’

Reuters reports that, last month, over 100,000 potential plaintiffs were permitted to pursue a class action against a New York-based debt collector and law firm.

The claim is that both Leucadia National Corp and the Mel S. Harris law firm were using ‘sewer service‘ to win default judgments in cases against debtors.

Sewer service is the practice of failing to properly serve a litigation notice to a defendant. Then, when the defendant fails to appear in court, the collector proceeds to apply for a default judgment – a judgment which the collector will almost always win.

Sewer service leaves consumers at a distinct disadvantage. Because the debtor was not properly served, they did not know they needed appear in court in the first place. In many cases, sewer service can lead to bank account seizures, wage garnishments, and damaged credit scores.

The 2-to-1 decision to allow the class action was made after both the Consumer Financial Protection Bureau (CFPB) and the Federal Trade Commission (FTC) notified the US Circuit Court of Appeals that any other ruling would hurt the efficacy of the Fair Debt Collection Practices Act (FDCPA), an act that has been protecting consumers from unfair and unlawful debt collection tactics since 1977.

Along with the CFPB and the FTC, the AARP and National Consumer Law Center are also supporting the plaintiffs in their claim.

Quoted by Reuters is the plaintiff lawyer, Matthew Brinckerhoff, noting the importance of this class action:

“The problem of unscrupulous debt collectors is nationwide… This class action provides a framework to obtain relief for a large number of victims.”

We’ve talked about sewer service before, here on Sewer service is a violation of the FDCPA and your consumer rights. If you too have been a victim of sewer service, contact a consumer attorney right away.

Comments 1 Comment

  1. A default judgment was ordered against me in a case that I was not notified of. I eventually got the judgment vacated when I was finally able to scratch and claw my way into court to give my testimony. While I was able to win the case eventually, I am still livid because of what was clearly a case of sewer service by a company that, according to the Open Access website for the San Bernardino Court, obtains hundreds of these a year. They claim that they have no control over what their process servers do but this company had two separate process servers tell blatant lies on their Proofs of Service. It’s clear this company benefits from defendants not being served. To the court it just looks like “deadbeat didn’t pay/deadbeat didn’t respond to a court summons.” It costs them a lot of money to have real defendants show up to court and tell their story of how they were cheated. My case is done. I’m not looking to pursue anything beyond what I’ve already accomplished as far as this case is concerned. But I would like to see SOMETHING happen to this company to put an abrupt end to their scam. They definitely target the poor, folks who are least able to defend themselves. It’s draconian.

      Comment by M. Lynn on April 7th, 2017 at 3:06 am

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