CFPB Sues Another Debt Collection Law Firm

4/18/2017 8:28:00 PM

CFPB accuses Weltman, Weinberg & Reis of misrepresenting meaningful attorney involvement in pre-litigation collection activity.

CFPBNewsIndustry Advancement Program

The Consumer Financial Protection Bureau filed a lawsuit Monday against Weltman, Weinberg & Reis Co., L.P.A., a Cleveland, Ohio-based law firm that collects consumer debt. The CFPB’s case, filed in Ohio federal district court, accuses Weltman Weinberg of using overly aggressive and illegal practices to intimidate consumers into paying debts when they would have not otherwise. 

The CFPB’s focus in the case rests with the pre-suit collection activity the law firm performed on behalf of original creditors as well as debt buyers who purchased defaulted consumer debts. In its complaint, the CFPB alleges that Weltman Weinberg’s attorneys were not meaningfully involved in reviewing consumer accounts, but sent demand letters and made collection calls falsely representing that attorneys were involved in collecting the debts. The CFPB claims that Weltman Weinberg’s misleading letters and calls, which misrepresented the level of attorney involvement in connection with the collection of millions of debts, deceived consumers in violation of both the Fair Debt Collection Practices Act and the Dodd-Frank Wall Street Reform and Consumer Protection Act. 

“We fundamentally disagree with the CFPB’s allegations and believe that this lawsuit is the result of our firm’s refusal to be strong-armed into a consent order,” Weltman Weinberg managing partner Scott Weltman said in a statement. “We are a law firm that is legally allowed, under federal and state law, to provide collection and legal services. We are being truthful with consumers and factually accurate when we use our name and our company’s letterhead for proper debt collection activity."

According to the complaint, starting in July 2011 Weltman Weinberg engaged in the following pre-litigation activities the CFPB deems to be unfair and deceptive practices to collect delinquent bills owed by consumers.

  1. Sent consumers collection letters creating false impression that attorneys had reviewed consumers’ files, when no attorney had conducted such a review. The CFPB alleges Weltman Weinberg sent demand letters using formal law firm letter head with the phrase “Attorneys at Law” at the top and the law firm’s name in the signature line, and, in some case referred to the possibility of “legal action” against individuals who did not make payments. The CFPB also asserts that the letters, which were often generated through an automated process, did not include any disclaimer notifying consumers that an attorney has not reviewed the consumer’s file or formed an independent professional judgment about the debt. The CFPB claims that such letters violated federal law because they mispresented that they were from an attorney who was meaningfully involved when, in fact, no attorney was involved in the review of the claim or in the preparation or sending of the letters. 
  2. Called consumers and falsely implied a lawyer was involved.  The CFPB alleges Weltman Weinberg made similar false assertions of attorney involvement in calls to consumer account holders. Specifically, the CFPB asserts Weltman Weinberg’s debt collectors called consumers and told them they were calling from a law firm, that it was the “largest collection law firm in the United States,” or the debt had been placed with “the collections branch of our law firm.”  The CFPB claims that such collection calls violated federal law because they implied that an attorney participated in the decision to make the collection calls when, in fact, no attorney was involved in the review of consumer accounts before the law firm’s debt collectors called consumers.    

The CFPB is seeking compensation for consumers, a civil fine, and an injunction against Weltman Weinberg. 

If you want to read more about the most recent significant cases and judicial decisions involving the credit and collection industry, ACA members can always find concise case summaries on the Industry Advancement Program website

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