Law firm settles probe into debt-collection practices for $1M
An investigation into shady debt-collection practices yielded a $1 million judgment against the industry’s biggest law firm, Attorney General Maura Healey said.
Healey, announcing the settlement yesterday with Lustig, Glaser & Wilson, said the firm went after the “wrong people” for the “wrong amount of money,” threatened people with civil arrests, and collected from people’s Social Security or disability income, which is barred from collections.
“What we’ve seen is some of (the) biggest players in (the) debtcollection industry are not focusing on getting it right,” Healey said. “Instead they are cutting corners or even breaking laws to make it more profitable to collect these debts.”
It’s unclear how much money Lustig, Glaser & Wilson wrongly collected, but Healey’s office said it filed 211,543 collections cases in Bay State courts between 2011 and 2016.
Lustig, Glaser & Wilson did not return calls for comment.
Ron Grenier of Marblehead said his disabled adult son — whose primary income was Social Security disability payments — was targeted for collections by the firm, which harassed him and said it would pull him into court to get the money.
“For someone who’s mentally challenged, the threat of being dragged into court is terrifying,” Grenier said. “The only choice was to make the payments to Lustig from his disability income.”
Healey said the types of debt run the gamut from consumer credit to medical debts and student loans. The settlement with the firm requires it to change its practices around protected income, collections without documentation, attorney review and misuse of lawsuits to pressure consumers. She said her office is looking at others who use similar practices.