Consumer Watchdog Loses Lawsuit Against Debt Collection Firm | Auto Finance News | Auto Finance News

Consumer Watchdog Loses Lawsuit Against Debt Collection Firm

A debt collection law firm, Weltman, Weinberg & Reis Co., LPA, won its lawsuit against the Bureau of Consumer Financial Protection, in which the firm was accused of violating the Fair Debt Collection Practices Act.

“It was a challenging process being sued by the U.S. government, but it was gratifying to get the result we wanted,” Scott Weltman, managing partner, told Auto Finance News. Weltman wasn’t the only law firm hit with accusations by the bureau, Weltman said, but the firm chose to fight back because “nothing [the bureau] said was true.”

The bureau filed suit against the Cleveland, Ohio-based firm in April 2017 for allegedly making statements on collection calls and sending collection letters creating the false impression that attorneys had meaningfully reviewed the consumers file, when no such review has occurred.

However, Federal Judge Donald Nugent of the U.S. District Court for the Northern District of Ohio wrote an opinion in favor of Weltman’s case writing that the bureau’s lawsuit “lacked merit.” The opinion “thoroughly vindicates Weltman’s processes” and is a “complete rejection of the CFPB’s unfounded allegations,” said Weltman.

According to the opinion, Nugent found that the bureau offered no evidence to show that any consumer was harmed by Weltman’s practice of identifying itself as a law firm in its demand letters and Weltman attorneys were “meaningfully and substantially involved in the debt collection process both before and after the issuance of the demand letters.”

This case follows the Consumer Financial Protection Bureau v. RD Legal Funding, LLC lawsuit which resulted in the bureau’s structure ruled unconstitutional by a federal judge in June.

Other recent losses at the federal court level include: the January 2018 rejection of the bureau’s requests for both restitution and an injunction in Consumer Financial Protection Bureau v. CashCall, Consumer Financial Protection Bureau v. Borders & Borders, PLC in July 2017, and Consumer Financial Protection Bureau v. Universal Debt Solutions, LLC, in August 2017.

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