A federal court has preliminarily approved a settlement on behalf of New Yorkers who alleged fraudulent debt collection practices. The $59 million settlement in the case, captioned Sykes v. Mel S. Harris and Associates LLC, No. 09 Civ. 8486 (S.D.N.Y), is believed to be the largest ever of its kind. The settlement is also expected to lead to the unprecedented vacating of approximately 195,000 court judgments. If your debt was owned by LR Credit, you may be a class member.
Plaintiffs’ lawsuit alleged that Defendants used fraudulent practices to file debt collection lawsuits, obtain default judgments, and then collect on those judgments; Defendants deny liability. The Defendants lost their appeal to the U.S. Second Circuit Court of Appeals in early 2015, in which they sought to invalidate the trial court’s certification of the class.