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Recent Results
Auto Fraud: 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: Schlanger & Schlanger, LLP settles debt collection harassment case for $10,000 plus attorneys’ fees and costs 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 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, which are to be determined by the Court.
Debt Collection Defense/Sewer Service: Lawsuit for credit card debt against Schlanger & Schlanger client dismissed after Court concludes that collector delivered Summons and Complaint to wrong address.
Debt collection law firm Goldman, Warshaw & Parrella, and its client, Harvest Credit Management, were sent packing when a New York Civil Court judge threw out their lawsuit against New York consumer Connie Athas for failure to properly serve her with a summons and complaint. The Court’s decision noted the “overwhelming” evidence that Ms. Athas, who was alleged to owe almost $17,000 on an old Chase credit card debt, had never lived at the address at which the process server claimed to have left the court papers. To read the court’s decision, click here.
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.
Fair Debt Collection Practices Act – 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.