The Consumer Financial Protection Bureau filed a lawsuit Monday against an Ohio law firm for allegedly engaging in illegal debt collection practices after the firm said it refused to agree to a settlement.
The CFPB alleged that Weltman, Weinberg & Reis in Cleveland sent collection letters falsely implying that lawyers had reviewed a consumer's account or made a determination that the consumer actually owed a debt. Some demand letters referred to possible "legal action," and some included payment coupons indicating the consumer could pay the debt through the law firm.
“Weltman, Weinberg & Reis masked millions of debt collection letters and phone calls with the professional standards associated with attorneys when attorneys were, in fact, not involved. Such illegal behavior will not be allowed in the debt collection market,” CFPB Director Richard Cordray said in a press release. “Debt collectors who misrepresent that a lawyer was involved in reviewing a consumer’s account are implying a level of authority and professional judgement that is just not true.”
Scott Weltman, the law firm's managing partner, said that he fundamentally disagreed with the CFPB's allegations and that the lawsuit "is the result of our firm’s refusal to be strong-armed into a consent order.”
“We are a law firm that is legally allowed, under federal and state law, to provide collection and legal services," Weltman said in a press release. "We are being truthful with consumers and factually accurate when we use our name and our company’s letterhead for proper debt collection activity."
Weltman said the company "cooperated fully" with a September 2014 civil investigative demand by producing "hundreds of thousands of pages of documents," and submitting to two investigational hearings.
The CFPB alleged in a 10-page lawsuit filed in the U.S. District Court for the Northern District of Ohio that the law firm sent millions of demand letters to consumers but that attorneys had not reviewed any aspect of the individual consumers' debts or accounts. The law firm employs 65 attorneys and has more than 650 employees overall.
The bureau alleges the law firm violated the Fair Debt Collection Practices Act and the Dodd-Frank Act. The agency is seeking to stop the illegal practices and recoup compensation for consumers who have been harmed.
Weltman countered by saying the CFPB’s investigation is based "on its interpretation of the law, and not on any actual violation of federal or state laws or regulations as they are written today.”
“We will continue to vigorously defend WWR's honest, ethical and compliant collection practices, and we look forward to our day in court,” he said.
