Debt Collector for Discover and Citibank Ordered to Stop "Junk Lawsuits"

Consumer bureau takes action against debt collection law firm, orders them to stop abuse, pay a fine

A top debt collection law firm for consumer finance providers such as Discover and Citibank is facing an enforcement action from the Consumer Financial Protection Bureau (CFPB).

The CFPB announced it is bringing an action against the law firm of Forster & Garbus for illegal debt collection practices, including the filing of junk lawsuits designed to intimidate consumers into paying claims.

“Forster & Garbus bombarded its customers with sketchy lawsuits on behalf of big lenders like Discover and Citibank,” said CFPB Director Rohit Chopra. “The CFPB will be scrutinizing large financial companies that enlist debt collection outfits operating lawsuit mills.”

A proposed settlement would prohibit Forster & Garbus from filing any new lawsuit against a consumer unless it has specific documents supporting the debt and certifies that an attorney reviewed those documents. The order would also require the company to dismiss any pending lawsuit where it cannot satisfy these requirements. Forster & Garbus would also be required to pay a penalty of $100,000, which would be deposited into the CFPB’s victims' relief fund.

In 2019, the CFPB sued Forster & Garbus alleging that, from 2014 through 2016, fewer than a dozen attorneys at Forster & Garbus filed more than 99,000 debt-collection lawsuits, while having documents to support only a fraction of those debts. The CFPB further alleges that Forster & Garbus falsely represented to consumers that attorneys were meaningfully involved in preparing and filing the lawsuits, violating the Fair Debt Collection Practices Act’s (FDCPA) prohibition against collecting debts by using false, deceptive, or misleading representations and the Consumer Financial Protection Act’s (CFPA) prohibition against deceptive acts and practices.

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