By Andy Metzger / State House News Service | JULY 27, 2017
Stoughton resident Alberta Silva said she was “terrified” when she received a summons from the state’s biggest debt collection firm that encouraged her to sign a judgment agreeing to pay a debt that she says she didn’t owe.
“They pulled me into court four times and each time they would waive that judgement in front of my face. ‘If you want your suffering to stop, just sign this,’ ” Silva said.
She said that after she told the firm she was dealing with the state’s attorney general’s office, the “harassment stopped.”
Silva appeared at a press conference last week as Attorney General Maura Healey announced that the law firm has agreed to pay $1 million and to change its practices to better protect consumers.
A consent judgement against Lustig, Glaser & Wilson alleges that the firm “routinely sued consumers for debts that they did not owe or debts that were inaccurate, and consistently violated state law and abused the court system in pursuit of debts,” according to the AG’s office.
“This will make debt collection in our state a fairer and more transparent process, and it will help advance the economic security of families here in Massachusetts by protecting people from illegal debt collection practices,” Healey said at a press conference in her office.
Under the judgement, Lustig will need to verify a person’s debt before seeking to collect it. The firm will need to cease using court processes to “pressure and intimidate consumers,” and an attorney will need to determine whether there is sufficient evidence to sue someone.
The firm, which bills itself as the “leading debt collections law firm in Massachusetts,” will also need to disclose to consumers that certain income is exempt from collection, such as Social Security payments, according to Healey’s office.
Lustig, Glaser & Wilson said the judgement ends a multi-year inquiry and pending Superior Court litigation and “reflects existing policies and procedures that have been in place at LGW for a number of years.” The agreement also includes provisions not mandated by laws or regulations, the company said, “to ensure that the needs of certain consumers facing particular hardships can be fairly addressed.”
“This agreement acknowledges that there are no findings of liability or wrongdoing on the part of LGW, no finding of harm caused to consumers and it does not impose any penalty on the firm,” the company said in a statement. “LGW felt it was in the firm’s best interest to end the expense and uncertainty of ongoing litigation. Throughout this process LGW cooperated fully and transparently, producing tens of thousands of pages of documents and answering all relevant questions. LGW has a long track record of employing best practices in consumer and commercial debt collections.”
According to the attorney general’s office, Lustig allegedly relied on spreadsheets provided by debt purchasers, which “allowed them to process up to thousands of consumer accounts for collection and litigation in a single day, all while knowing that the information was often inaccurate and unverified.”
Healey said that organizations purchase debts at steep discounts and then hire law firms to help collect the money owed – but people are sometimes misidentified or debts are listed that were already paid.
Over the past few years, Lustig filed more than 200,000 suits and collected about $125 million in debts, Healey said. The judgement dated July 20 was also entered against the firm’s principals, Ronald Lustig and Kenneth Wilson.
“We went after them, we sued them, and this judgement today resolves this case,” Healey said. She said the firm handled student, medical and consumer debt.
Healey said the $1 million could be used to make restitution to hundreds or thousands of people harmed by the debt collection practices.
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