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Foreclosure firm found liable for unfair collecting practices

On Behalf of | Oct 4, 2012 | Firm News, Home Foreclosure

A county judge in Palm Beach, Florida found that one of the state’s largest foreclosure law firms is liable for unfair business practices. The class action lawsuit was brought in 2009 over the firm’s fees. The firm shut down in 2011 after an investigation by the Florida Attorney General and a scandal over alleged robo-signing of documents.

The controversy in this case was over whether the firm could serve several unknown parties summonses in foreclosure cases. The firm had been sending out summonses to “unknown tenant” or “unknown spouse” and charging fees for each of those documents even if they were served to a household with only one person living there and no documented tenants.

The judge found that these practices are unfair and deceptive to consumers, violating the Florida Consumer Collection Practices Act and the Florida Deceptive and Unfair Trade Practices Act.

The court also wrote that the law firms that were defendants in the case knew that what they were doing was wrong and that the debts they were attempting to collect were illegitimate.

Many firms have apparently been employment the tactic of serving unknown parties with summonses in a foreclosure proceeding, which they argue is necessary in order to cover all of their bases. However, the borrower who is the subject of the foreclosure is billed for all of these summonses at about $45 each, which amounts to a deceptive business practice according to this ruling.

This is not the only case being brought against this particular law firm, which was once known as Florida’s largest “foreclosure mill.” They plan to appeal the ruling based on some other contradictory decisions in different cases against them.

Source: Palm Beach Post, “Palm Beach County ruling: Foreclosure law firm wrong to charge for paperwork served to ‘unknowns'” Kimberly Miller, Oct. 1, 2012.

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