US consumer bureau sues debt-collection law firm

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Associated Press

Posted on July 14, 2014 at 3:01 PM

Updated Monday, Jul 14 at 11:01 PM

WASHINGTON (AP) — The Consumer Financial Protection Bureau sued a major debt collection law firm on Monday, alleging it is a "mill" that produces shoddy, mass-produced credit-card collection lawsuits.

The bureau's claim was filed in federal court in Atlanta and states that Frederick J. Hanna & Associates failed to do basic due diligence on the accuracy of suits it filed to collect defaulted consumer credit-card debts. In Georgia, one attorney signed off on 180,000 lawsuits over two years.

In a statement, Hanna & Associates said "we strongly deny the allegations of the complaint and, moreover, the overall characterization of our law firm."

The suit signaled potential trouble for other collections law firms and the banks that hire them. Hanna & Associates' past clients include JPMorgan Chase & Co and Capital One.

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