Americans caught up in an alleged illegal debt collection scheme could get financial compensation from a class-action lawsuit.
Gotham Process, a service that delivers legal forms, agreed to pay $1.35 million as part of a settlement.
Those joining the class-action suit are expected to receive at least $200, but could receive full reimbursement for thousands collected under false premises.
The deadline to file a claim is October 26, 2023.
Gotham Process allegedly mishandled legal documents, primarily in New York, resulting in thousands paying for lawsuits they did not know about.
The company “strongly” denies any wrongdoing, according to the settlement website, but two individuals accused of facilitating the scheme have agreed never to work as legal process servers again.
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The law firm suing Gotham Process said over 3,200 New Yorkers have been impacted since 2016.
THE ALLEGED SCHEME
Gotham Process was not the only business involved with the debt collection scheme.
According to the settlement website, two servers with Gotham Process were accused of improperly delivering legal documents on behalf of a debt collection law firm.
The law firm Mullooly, Jeffery, Rooney, & Flynn, LLP was collecting debt on behalf of private companies and financial institutions. This requires legal documents to be delivered by process servers like those employed by Gotham Process.
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The lawsuit says Gotham Process workers Carl Bouton and Bassem Elashrafi falsified documents and failed to deliver notice of debt collection suits to those being sued.
Legal process servers like Gotham are obligated to accurately deliver lawsuit information to individuals being sued. This is because if an individual does not respond to a court summons or notice of a lawsuit, a judge can rule against them by default.
As a result of Gotham Process’ alleged false deliveries, thousands of people claim they were completely unaware they were being sued.
Some found out about the lawsuits after courts had already ruled against them — money was being taken from their wages to pay back the alleged debts they had been sued for, in some cases years earlier.
According to the suit, the two process servers submitted allegedly false affidavits saying they served notice of the lawsuits to relatives of those being sued.
In many cases, they allegedly submitted names of relatives who do not exist.
Mullooly, Jeffery, Rooney, & Flynn has collected for financial institutions like Bank of America.
THE AGREEMENT
The law firm accused of the scheme has agreed to permanently stop collecting on the debt involved in the suit but maintains that there was no wrongdoing by the firm.
“This case shows how just two rogue process servers can harm thousands of New Yorkers, leading to devastating financial impacts for moderate- and low-income consumers,” said Shanna Tallarico, project director at New York Legal Assistance Group, who brought the lawsuit.
Those impacted can submit a claim online.
If any class member who does not opt out of the settlement finds that debt continues to be collected if the settlement is finalized, they retain the right to dispute those charges further, the class action site says.
MORE CLASS ACTIONS
Companies under suit by large classes of people often settle to avoid the costs of a legal battle in court.
Another company that has taken this path is Hometrust Mortgage.
The settlement offered eligible individuals $400 after a data breach but expired on September 11.
However, a separate ongoing data breach settlement is offering $4,000 to impacted class members.
Inntopia, which oversees payment on many websites, was sued in Vermont after payment data was leaked.
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A lawsuit surrounding Facebook data offers $7.35 million to many impacted.
Former employees of the Chicago Transit Authority may be eligible for cash.
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