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Judge approves debt-collection settlement

State residents involved in a class action lawsuit against a group of debt collection agencies will have their debts erased and lawsuits against them dropped as part of a settlement agreement.

The class will also receive $575,000 to be distributed among the 3,195 class members, defined as Maryland residents sued by the defendants from Sept. 22, 2006, to Sept. 22, 2009.

The parties entered the proposed class action settlement agreement March 26, and Judge Richard D. Bennett issued a final order on the agreement in U.S. District Court on Aug. 24.

The class, represented by Wilson C. Winemiller Jr. of Middle River, Warren P. Adams of Frederick and Mickey S. Slaghter of Lusby, filed suit against four collection agencies working together who acquire consumer debts, then try to collect on them by suing Maryland consumers, according to court documents. The debts are usually beyond the statute of limitations, had already been ruled void or were previously discharged in bankruptcy.

The agencies are also not registered or licensed in Maryland, according to court documents.

Within 10 days of the judge’s final order, each class member’s debt will be eliminated, lawsuits against them will be dropped with prejudice, all judgments against them will be satisfied and all judgment liens released. The debts will also be removed from the members’ credit scores.

The settlement is the latest of several reached this year under state and federal debt-collection laws, with Scott C. Borison of Legg Law Firm LLC in Frederick and Peter A. Holland of The Holland Law Firm PC representing the plaintiff class.

“The main thing is that it’s a lot of people and a lot of debt and getting rid of judgments and liens and lawsuits,” Holland said. “That is a really good thing for consumers in a credit-starved economy.”

Mitchell Rubenstein of Rubenstein & Cogan in Gaithersburg, one of the defendants’ attorneys, said he did not want to comment on the case.

As class representatives, Winemiller will receive $10,000 and Adams and Slaghter will each receive $7,500. After attorneys’ fees and other costs of $231,970 are taken out of the fund, the rest will be distributed to the other class members who file claim forms.

Class members will receive no more than $500 each, according to the settlement agreement.

The defendants are a group of collection agencies and include Worldwide Asset Purchasing LLC, Worldwide Asset Purchasing II, West Receivable Services Inc. and West Corp. Worldwide and Worldwide II are subsidiaries of West Receivable, and West Receivable is a subsidiary of West Corp.

“The defendants are the alter ego of each other and coordinate their illegal conduct directly with each other and indirectly through their mutual attorneys,” the plaintiffs’ complaint said.

The plaintiffs alleged that the collection agencies would acquire defaulted consumer debt, often for as low as a few cents on the dollar. The companies then attempted to collect on the debts by contacting consumers and suing them, according to the complaint. The plaintiffs also alleged that the agencies disclosed personal information of consumers, including Social Security numbers.

“Virtually every collection effort in Maryland by Defendants, including each and every civil action filed in Maryland and each and every judgment lien filed in Maryland, is an unfair and deceptive trade practice,” the complaint said.

WINEMILLER ET AL. V. WORLDWIDE ASSET PURCHASING LLC ET AL.

Court:

U.S. District Court, Maryland, Baltimore

Case No.:

1:09-cv-02487-RDB

Judge:

Richard D. Bennett

Outcome:

Settled without trial for $575,000

Dates:

Suit filed: Sept. 22, 2009

Proposed settlement entered: March 26, 2012

Settlement approved: Aug. 24, 2012

Plaintiffs’ Attorneys:

Scott C. Borison of Legg Law Firm LLC in Frederick, Peter A. Holland of The Holland Law Firm PC in Annapolis and Michael Gregg Morin of counsel to The Holland Law Firm PC.

Defendants’ Attorneys:

Mitchell Rubenstein of Rubenstein & Cogan in Gaithersburg, Dayle M. Van Hoose and Bryan C. Shartle of Sessions, Fishman, Nathan & Israel LLC in Tampa, Fl., Erin O. Millar of Whiteford, Taylor & Preston LLP in Baltimore

Count:

Violations of the Maryland Consumer Debt Collection Act, the Maryland Personal Information Protection Act, the Maryland Consumer Protection Act, the Fair Debt Collection Practices Act

 

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