Debt Collection Law Firm Faces Hot Water For Dragging Wrong Person Into Court; Resists Judge's "Suggestion" To Compensate Victim For Lost Day's Pay

In Brooklyn, New York, The New York Times reports:

• Conducting a digital dragnet, [debt collection firms] troll through commercial databases searching for debtors. Because of the vast sloppiness and fraud involved, Attorney General Andrew M. Cuomo has shut down two of the collection firms and is suing 35 law firms tied to the business.

• A person who blows off a civil court summons — even if wrongly identified — faces a default judgment and frozen bank accounts. But to date, there have been few penalties against collectors for dragging the wrong people into court. Until [Mark] Hoyte turned up last week in Brooklyn.

• After trying to settle the case in the hallway — the 11th floor of 141 Livingston Street is an open bazaar of haggling — the collections lawyer realized he had the wrong man. He got Mr. Hoyte to sign an agreement that would end the case against him, but not against the Mark Hoyte who actually owed the $919. In front of the judge, the lawyer, T. Andy Wang, announced that the parties had reached a stipulation dismissing this Mr. Hoyte from the suit.

• Not so fast, said the judge, Noach Dear. “Why didn’t you check these things out before you take out a summons and a complaint?” Judge Dear asked. “Why don’t you check out who you’re going after?” [...] “So you just shoot in the dark against names; if there’s 16 Mark Hoytes, you go after without exactly knowing who, what, when and where?” Judge Dear asked. [...] The judge turned to Mr. Hoyte, who works as a building superintendent, and asked him how much a day of lost pay would cost. Mr. Hoyte said $115.

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• The judge said he was prepared to dismiss the case and wanted Mr. Hoyte compensated for lost wages. “Your honor,” Mr. Wang said, “I’m personally not willing to compensate him.” No, the judge said; he meant that the law firm, Pressler & Pressler — one of the biggest in the collection industry — should pay the $115. He would hold a sanctions hearing, a formal process of penalizing the law firm for suing the wrong man.

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• He told Mr. Wang and Mr. Hoyte to come back to court in January. “If, somehow, counsel, you decide that you’re going to compensate him for his time off,” Judge Dear said, “I will reconsider sanctions.”

For the story, see Hello, Collections? The Worm Has Turned.

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In a related story, see The Village Voice: An Unlikely Rescuer from the Jaws of Debt (By 9:30 a.m., the 11th-floor hallway of a courthouse in downtown Brooklyn is filled with tight huddles made up of people in debt and the lawyers who are after them to pay):

• It's a scene that will be repeated over and over again in the courtroom of Judge Noach Dear, as he repeatedly dismisses lawsuits, denies attorneys seeking payment, and sends people on their way, amazed that they are free from further harassment by collection agencies. Twice on a recent morning, his rulings are met with standing ovations.