A federal court approved the settlement on behalf of New Yorkers who alleged fraudulent debt collection practices. The $60 million settlement in the case, captioned Sykes v. Mel S. Harris and Associates LLC, No. 09 Civ. 8486 (S.D.N.Y), is the largest ever of its kind. The settlement should also lead to the unprecedented vacating of approximately 195,000 court judgments and result in the forgiveness of over $1 billion in alleged debt. Plaintiffs’ lawsuit alleged that Defendants used fraudulent practices to file debt collection lawsuits, obtain default judgments, and then collect on those judgments.
Judge Denny Chin found that the settlement is a “remarkable resolution” to “hard-fought litigation” that will bring “extraordinarily meaningful benefits to tens of thousands of individuals.” He concludes that the settlement will have an “immediate and enormously positive impact on the lives of many.”