Mayfield v. Asta Funding et al.
14 Civ. 2591 (S.D.N.Y.)
In March 2014, the Special Litigation Unit filed a class action lawsuit in the United States District Court for the Southern District of New York on behalf of thousands of New Yorkers targeted in a multimillion dollar debt collection scheme. The suit, Mayfield v. Asta Funding, et. al, alleged that Palisades Collection of New Jersey and its law firm, Pressler & Pressler, aggressively used a strategy of improper litigation to wrongfully obtain and enforce millions of dollars of default judgments. Palisades Collection is a subsidiary of Asta Funding (NASDAQ: ASFI), one of the nation’s largest debt buyers.
The class action sought relief for a number of fraudulent debt-collection practices, but focused in particular on the defendants’ aggressive use of a mass litigation strategy that targeted approximately 60,000 New York residents, including many who are poor or working poor, over a two-year period, suing them to collect purchased debt by obtaining default judgments against them, and using those judgments to seize consumers’ wages, and other assets, often without ever notifying the alleged debtors of the lawsuits.
In September 2017, after years of negotiations, the parties entered a global settlement resolving all claims against Palisades Collection and Pressler & Pressler on behalf of the over 60,000 class members. The settlement provided for $3.9 million in monetary relief to be distributed to class members from whom Palisades and Pressler unlawfully collected money in connection with the suits. The agreement also bars Palisades and Pressler from any further collections on the debt – saving the class from over $2 million of estimated future collections. Palisades and Pressler committed to cooperate with the efforts of NYLAG and its co-counsel to seek vacatur (or cancellation) of all of the outstanding judgments against class members, in collaboration with the New York court system. And Pressler agreed to work with NYLAG to improve certain of its debt collection practices that affect NYLAG clients. The Court granted final approval to the settlement on April 10, 2018.
“At long last, this settlement brings needed relief for tens of thousands of New York consumers who were treated unfairly by these debt collection lawsuits, and from whom millions of dollars were extracted unlawfully,” said Danielle Tarantolo, Co-director of NYLAG’s Special Litigation Unit.
“We hope this settlement sends a message to the debt buying and debt collection industry that private individuals and committed advocates will take legal action when necessary, to ensure that debt collection practices don’t violate the rights of low-income consumers,” said Tarantolo.
NYLAG Attorneys: Jane Greengold Stevens, Danielle Tarantolo, Julia Russell
Co-Counsel: Hughes Hubbard & Reed LLP