One debt-collection law firm that signed the consent order without admitting wrongdoing was Cohen & Slamowitz in Woodbury, which filed more than 300,000 suits in the four years from 2005 through 2008. The firm has 14 lawyers. Those numbers—14 lawyers filing 80,000 suits per year—got a lot of second looks and rolling eyes. Cohen & Slamowitz, through a lawyer representing the firm, declined comment.
With that kind of volume “you see a significant number of people, though a minority of the cases, who are sued on debts already paid or who otherwise don’t owe it,” says Daniel Schlanger, a consumer lawyer at Schlanger & Schlanger in White Plains.
“I think for most of the firms if you’re talking about the bigger players, those [errors] are not typically intentional,” he says. “But if you’re talking about service on bad addresses, the problem is they have no incentive to get it right. Their business model is based on defaults. They only have that incentive after getting the default, when they want to collect. Then they are fantastic at finding a good address.”
“The system’s incentives are out of whack,” Schlanger says. “The volume players have determined that meaningful review is uneconomical.”
