A recent lawsuit has helped expose what advocates describe as a reign of financial terror, threatening financially distressed consumers with spurious lawsuits to basically coerce people into paying debts they did not owe them.
News Story (NATIONAL, New York)
December 2, 2015
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Tags: Consumer Protection, Debt Collection
Organizations mentioned/involved: MFY Legal Services (New York City), Center for Responsible Lending (CRL), Consumer Financial Protection Bureau (CFPB)
The debt-collection industry has, since the 2007 financial crisis, exploded into a massive quasi-legal racket, systematically suing consumers into financial ruin. Now community activists are pushing back against debt collection schemes in the courts, with a major settlement that could clampdown on debt profiteering nationwide.
Under the settlement in Federal District Court, involving various companies colluding in a huge debt-collection scheme, about $59 million will be paid out to individual consumers in a class of roughly 350,000 New Yorkers. They match the profile of typical debt-racket victims: mainly the poor and people of color.