Recent Results
Unfair debt collection: Schlanger & Schlanger settles federal lawsuit against Navy Federal Credit Union for $15,000, reduces and restructures consumer’s debt
Virtually every day over a 9 month period, Navy Federal Credit Union called consumer Carolee Dempsey approximately 6-12 times on her work phone, and another 6-12 times on her home phone regarding an overdrawn credit card account. NFCU conduct was particularly unjustified in light of the fact that Dempsey was making payments in order to get caught up. Not only was the volume of calls (estimated in the thousands) abusive, but the content when she did pick up was outrageous. NFCU unlawfully threatened to terminate her child support payments and her son’s social security checks.
Cases such as those pose a practical difficulty, as the consumer protection attorney’s primary tool with regard to collection harassment, the Fair Debt Collection Practices Act (FDCPA), is not available because Navy Federal Credit Union was an original creditor. (See our recent Consumer Law Update on lack of liability for primary creditors under FDCPA).
Undeterred, Schlanger & Schlanger, LLP filed an action in federal court, Eastern District of New York, under the Fair Credit Billing Act, an underutilized subsection of the Truth in Lending Act addressing credit card payment disputes, and included state law claims for violations of N.Y. General Business Law § 349, which prohibits unfair and deceptive business practices, and for nuisance and intentional infliction of emotional distress. NFCU quickly settled, paying Plaintiff $15,000.00. As part of the settlement, Navy Federal Credit Union also significantly reduced and restructured her credit card debt, removing all previous interest and charges, and reducing the interest rate to zero going forward and.
Unfair debt collection: Court finds no personal jurisdiction over consumer based on “unrefuted documentary evidence” that debt collection firm Goldman, Warshaw & Parella served papers at wrong address
A victim of improper service, Letty Batista came to Schlanger & Schlanger looking to fight a judgment that had been illegally obtained against her.
In February 2009, Letty lived in Orange County, New York. Goldman, Warshaw & Parella, however, sued her in Westchester County Supreme Court, and the firm’s process server filed papers claiming to have to served her with the summons and complaint at a years-out-of-date address, in Bronxville.
Peter Lane from Schlanger & Schlanger met with Letty, quickly assessed the situation, and moved to have the judgment vacated because of the failure by Goldman, Warshaw & Parella to establish the Court’s personal jurisdiction over the defendant. In short order, Judge Mary Smith of Westchester Supreme Court issued an order finding that “the unrefuted documentary evidence submitted by defendant establishes that she did not reside [in Bronxville] at the time of purported nail and mail service purportedly effected in February 2009. Accordingly, the Court finds that proper personal jurisdiction over defendant had not been obtained and consequently that the entered default judgment must be and is hereby vacated.” The court also ordered the debt collector’s income execution lifted. Click here for decision.
If you find yourself the victim of sewer service, please give us a call at 914-946-1981, or fill out our online questionnaire. Default judgments obtained by means of bad service can often be vacated and dismissed.
Unfair debt collection: Schlanger & Schlanger takes default judgment against debt collector Enterprise Recovery Systems for $7,400
James Healy went to college in the 1980s. So when he started getting calls in 2010 seeking payment for almost $27,000 in allegedly unpaid tuition to Columbia University, he was shocked to say the least. Diligently, he called his alma mater, Columbia, and the registrar confirmed to him that he did not owe any money to the University. But Enterprise wouldn’t take “no” for an answer, even after Mr. Healy told Enterprise that Columbia had confirmed that he owed no debt. He even pointed out that Columbia wouldn’t have given him a diploma if he’d still owed them tuition, but logic seems to get consumers nowhere in the face of a determined and illogical debt collector.
So it was for Mr. Healy, and Enterprise kept calling. Not only that, they started calling James’ neighbors and relatives. People who had minimal contact with James, even though the debt collector already had up-to-date contact information for James. The harrassment had to stop. James came to Schlanger & Schlanger, and we filed suit on his behalf in the Southern District of New York alleging violations of the Fair Debt Collection Practices Act (FDCPA).
Enterprise ceased its collection attempts after we sent notification that our firm represented Mr. Healy, but never filed an answer to the complaint, despite having in been in touch with us prior to filing, and despite knowledge of the default hearing. We took a default judgment for over seven thousand dollars, including attorney’s fees and costs and are now in the process of enforcing the judgment.
Auto Fraud: Northern Auto Traders, M&T Bank, forced to unwind fraudulent car loan, and pay consumer $38,000
After seeing Northern Auto Traders’ advertisement on cars.com for a 2007 Mercedes-Benz CLS 550, James San Pedro headed to the Queens dealership to make the car his own. He agreed to pay $31,000 for the car, and left almost $10,000 as a first down payment, with another payment of nearly $12,000 to follow shortly. That’s when the problems started for James.
Soon after leaving the first down payment, the auto dealer called James to inform him that he needed a co-signer to secure financing for the remainder of the purchase price. When he came back with the second payment, and a co-signer, James and his co-signer were hurriedly presented with a series of documents to sign.
Through a variety of tricks and misrepresentations, including misleading disclosures, a fictitious warranty, not providing copies of the signed contract, presenting the documents only in English even though James doesn’t read English, and blank spaces left in the contract, Mr. San Pedro was roped into spending far more than the initially agreed upon $31,000. Moreover, his co-signer was now on the hook too.
Within days of signing the papers, James’ co-signer began receiving bills from the finance company, M&T Bank, that made no mention of James. Concerned, she immediately called the finance company and got copies of the contract, which to her shock had been altered, and now made no mention of James. James and his co-signer protested to Northern Auto Traders and M&T, their complaints fell upon deaf ears, so they turned to Schlanger & Schlanger.
Schlanger & Schlanger, LLP filed a lawsuit on Mr. San Pedro’s behalf to make the auto dealership and finance company liable for violations of the Truth In Lending Act, the Magnusson Moss Consumer Warranty Act, and New York General Business Law Sec. 349, as well as for fraud, breach of contract, and unjust enrichment. Defendants quickly agreed to settle the claims, paying Mr. San Pedro and his co-signer $38,000.00, cancelling the auto loan, and allowing Mr. San Pedro to return the vehicle.
Mistaken Identity: Forster & Garbus sues wrong person, Schlanger & Schlanger gets case dismissed, and the debt collector pays consumer for her trouble
Schlanger & Schlanger, LLP settles case in favor of a New Yorker whose common name happened to land her in trouble with Forster & Garbus.
There must be hundreds of people named Andrea Vasquez in the New York City metropolitan area, let alone New York State, but not all of them owe money to American Express. A simple enough lesson that the debt collection law firm of Forster & Garbus was forced to learn the hard way after they were hired to collect an over-due debt, and sued the wrong person. In a surprisingly common scenario, the innocent Andrea Vasquez suddenly found herself facing a lawsuit in state court for a debt she simply did not owe, and so, she turned to Schlanger & Schlanger who quickly negotiated a settlement in her favor with everyone involved.
As part of the pre-litigation settlement, American Express admitted that they had sued the wrong person and that our client, the innocent Andrea Vasquez, did not owe them any money. Moreover, Forster & Garbus paid the consumer $4,500 and voluntarily discontinued the state collection case against her with prejudice.
Auto Fraud: Turning the tables on auto dealers who hide finance charges
Schlanger & Schlanger, LLP settles case against used car dealer for charging bogus fees and inflated interest for $36,000.
Mr. Magliocca responded to an advertisement to purchase a vehicle for the price of the $28,900. Through a variety of tricks and misrepresentations, including hidden “rate buy down” fees, costly “free warranties,” and misleading disclosures, Mr. Magliocca was roped into spending far more. His complaints to the dealer fell upon deaf ears.
Schlanger & Schlanger, LLP filed a lawsuit on Mr. Magliocca’s behalf to make the auto dealership, the warranty company and the current owner of the vehicle loan liable for violations of the Truth In Lending Act, the Magnusson Moss Consumer Warranty Act, and New York General Business Law Sec. 349, as well as for fraud, breach of contract, and unjust enrichment. Defendants settled this auto fraud lawsuit for $36,000 and Mr. Magliocca kept his vehicle.
For more information about predatory auto financing scams, click here.
Unfair Debt Collection: Cohen & Slamowitz sanctioned for filing a frivolous motion, settles case in consumer’s favor shortly thereafter
Schlanger & Schlanger, LLP settles debt collection harassment case for $10,000 plus attorneys’ fees and costs of $68,262 after federal judge sanctions debt collector for frivolous motion.
Cohen & Slamowitz, LLP, one of New York’s largest debt collection law firms received a stinging rebuke from a federal district court judge, who ruled in a published opinion that its motion to dismiss a lawsuit brought under the Fair Debt Collection Practices Act (FDCPA) by Schlanger & Schlanger, LLP on behalf of New York consumer Gloria Shepherd was frivolous. Shepherd v. Cohen & Slamowitz, 668 F.Supp.2d 579 (SDNY 2009). Shortly after the Court’s decision was released, the unfair collection practices lawsuit – based on Cohen & Slamowitz’s attempt to collect a debt that had already been paid – was settled for $10,000 plus reasonable attorney’s fees and costs.
Over Cohen & Slamowitz’s objections, United States Magistrate Lisa Smith later awarded fees and costs of $68,262.62. Shepherd v. Law Offices of Cohen & Slamowitz, LLP. 2010 WL 4922314 (S.D.N.Y., November 29, 2010).
Debt Collection Defense: Forcing a collection firm to release a young couple’s bank account
What if you get sued over a debt you didn’t even know you owed? That’s exactly what happened to Daniel and Michelle, a young couple who out of the blue found their bank account frozen by a court ruling in a lawsuit brought by a creditor. The lawsuit was brought based on a debt allegedly incurred years earlier on a Discover Card. Daniel and Michelle were not even aware of the lawsuit, since the papers had been served at the address where Daniel grew up, an address where neither he nor his parents had lived for many years.
Having never gotten notice, Daniel and Michelle of course did not respond, the result being that a default judgment was taken against them (that is, if you don’t answer the complaint, the other side wins by default). At this point Cohen & Slamowitz, a large New York debt collection firm, located Daniel and Michelle’s current bank account and had that frozen in an attempt to strongarm the couple into paying the debt.
When Daniel and Michelle explained they had never been served in the lawsuit, C&S ignored them and demanded payment. That’s when Danny and Michelle retained Schlanger & Schlanger, LLP. We filed an order with the court demanding C&S show cause and including numerous proofs of the couple’s actual residence at the time of service. In addition, we demonstrated that the creditor hadn’t provided any proof that the debt was actually incurred, and also argued that at this point any attempt to re-serve the suit at the correct residence would be barred by the statute of limitations. For their part, C&S argued that they should only have to vacate the default if Danny and Michelle waived all defenses based on failure to be served properly.
The judge ruled in favor of Danny and Michelle and vacated judgment, dismissing the case and ordering the bank account to be released.
Read the opinion here (PDF File, 145KB)
To read a similar unfair debt collection case that Schlanger & Schlanger also won, click here (PDF File, 45KB)
The rules for bank attachments in New York have been revised and improved recently to provide better protection for consumers. See attorney Daniel A. Schlanger’s article on the subject.
Unfair Debt Collection: Turning the tables on a collection firm that committed unfair and deceptive practices
Being sued over debt you were unaware of – and being unaware of the lawsuit too! – is more common than you might expect. Susan’s bank account was attached based on a balance related to an old credit card she no longer used. The debt had been sold to a debt buyer looking to collect an amount bloated by interest, fees and penalties.
Why didn’t Susan know about the lawsuit? Because the collection firm had served the summons and complaint at an old address – even though they had her current address on file. Moreover, the collection firm used unfair practices to obtain information about her bank account, having account representative “negotiate” with her in order to draw out information about her employment, income, financial accounts and so on. Not only is this a deceptive practice, but as it would turn out, the collection firm didn’t even have a license issued by the New York City Department of Consumer Affairs.
Susan retained Schlanger & Schlanger, LLP. Not only did our firm get the state court judgment against her dismissed, but we also brought a federal lawsuit against the collection agency on the grounds that they were in violation of the Fair Debt Collection Practices Act (FDCPA) for collecting without a license; serving at the wrong address when they should have known the correct one; using false pretenses to obtain personal information; and suing for more money than she actually owed. The case settled out of court and our legal fees were paid as part of the settlement.
Auto Fraud/Truth In Lending: Protecting a businessperson victimized by fraud at an auto financing company
Never co-sign an employee’s auto loan – that’s a lesson Bill learned the hard way. Bill’s employee skipped town with the car (he eventually got it back) and now the auto financing company was after Bill, seeking payments for amounts that Bill believed were higher than they should have been.
Bill came to Schlanger & Schlanger, LLP with his copy of the auto contract in hand – and it was a good thing he’d held on to it. When he got the finance company to send him their copy of the contract, it was clear their copy was a forgery – someone had forged Bill’s signature on a contract with substantially higher amounts (this could have happened either at the dealership or at the finance company itself).
When Bill had confronted the finance company with this information they had ignored it. Since Bill didn’t want the distraction of a lawsuit, we sent a strong, detailed letter to the auto finance company, documenting the fraud and describing the many statutory violations that had occurred.
Once the auto finance company’s lawyer saw our letter, he quickly got in touch and we negotiated a deal in which the car was returned and the finance company waived the more than $20,000 they were claiming they were owed. We also got them to agree in advance to pay $2000 if Bill were ever to be contacted by a collection agency seeking payment in this now-settled matter. As it happened, a few months later, a collector did indeed call him. Schlanger & Schlanger followed up with the auto financing company’s general counsel, providing specific detail about the collection agency, the representative, time of call and so on. In short order, Bill received a $2000 payment per the terms we had previously agreed on.
Note: These case studies contain names that have been changed to protect client confidentiality. The case studies above are for informational purposes only. Schlanger & Schlanger, LLP cannot and does not guarantee the outcome of any case.