Judge Certifies Class Action Challenging Illegal Debt Collection Practices

  • September 4, 2012

In a groundbreaking decision, federal judge Denny Chin granted class-action status in a case brought on behalf of more than 100,000 New Yorkers harmed by a massive consumer debt collection scheme. The class-action lawsuit, Sykes v. Mel S. Harris and Associates LLC, charges that a debt collection ring engaged in persistent robo-signing and conspired to defraud New Yorkers of millions of dollars, in violation of federal racketeering and fair debt collection practices law.

In its 42-page decision, the court cited widespread evidence that the defendants had fraudulently obtained tens of thousands of default judgments against New Yorkers, by filing false affidavits and intentionally failing to notify people that they were being sued. The named plaintiffs are low-income New Yorkers who were never served by the debt collectors, and who only discovered that they had been sued in debt collection cases after default judgments were illegally entered against them. The named defendants include Leucadia National Corporation, a public corporation that buys debts for pennies on the dollar; Mel S. Harris and Associates LLC, one of the largest debt collection law firms in the state; and Samserv, Inc., a process serving company.

The plaintiffs are represented by ECBAWM’s Matthew D. Brinckerhoff and Eisha Jain, along with co-counsel the Neighborhood Economic Development Advocacy Project and MFY Legal Services, Inc.