The Consumer Financial Protection Bureau announced today that it has filed a proposed consent order in federal court that would resolve a lawsuit against Frederick J. Hanna & Associates, and its three principal partners, for operating an illegal debt collection “lawsuit mill.”
If approved by the court, the firm and its principle partners will be barred from employing illegal debt-collection practices, including “filing lawsuits without being able to verify the consumers’ debt is owed, and intimidating consumers with deceptive court filings,” according to a CFPB press release.
The order would also require the firm and its principals to pay $3.1 million to the Bureau’s Civil Penalty Fund.
In the proposed consent order – which can be read in full here – the bureau alleged that in the firm’s efforts to collect debts owed to others, it “used complaints that falsely represented or implied meaningful attorney involvement, knowingly or recklessly used affidavits executed by affiants who misrepresented their personal knowledge of material facts.”
Although automotive debt collection is not singled out in the proposed consent ordered, the Georgia-based law firm collects debt on auto loans, as well as student loans and credit cards, according to its website.
