In 2014, the CFPB joined an ongoing fight against Frederick J. Hanna and Associates by filing a lawsuit alleging that the firm was “a veritable factory churning out thousands of poorly researched lawsuits aimed at intimidating victims into paying debts they sometimes already paid or don’t legally owe.” The CFPB alleged that the volume of lawsuits was significantly higher than could have feasibly been handled by the number of attorneys working for the firm and in 2016, a consent order required the firm to pay the CFPB a $3.1 million penalty.

• “The CFPB filed a suit alleging the Hanna firm is a veritable factory churning out thousands of poorly researched lawsuits aimed at intimidating victims into paying debts they sometimes already paid or don’t legally owe.” The case, 1:13-cv-13167, was filed in the U.S. District Court for the Northern District of Georgia Atlanta Division. At the time, the firm was “a 400-employee operation that operates out of a grocery-store sized office in Marietta.” They collected “debts for banks and credit card issuers such as JP Morgan Chase, Bank of America and Capital One, and it represents companies that buy portfolios of old consumer debt.” [Russell Grantham, “Feds: Marietta debt collector a lawsuit ‘factory'”, The Atlanta Journal-Constitution, 07/26/14]

• The firm “collected millions of dollars a year, the agency said, by filing more than 350,000 lawsuits in Georgia alone from 2009 to 2013, even though it had no more than 16 attorneys at the time. One lawyer filed more than 138,000 lawsuits in two years.” These “‘high-volume litigation tactics’ often run afoul of federal consumer protections,” according to the CFPB. “Relying on incorrect or deceptive debt claims that are poorly researched by the lawyers,” the firm intimidated individuals into inflated or incorrect payments. A substantial portion of the firm’s 400 employees “work in call centers, trying to collect old debts.” [Russell Grantham, “Feds: Marietta debt collector a lawsuit ‘factory'”, The Atlanta Journal-Constitution, 07/26/14]

• The small pool of attorneys who worked for the firm “‘spend no more than one minute reviewing and signing’ the lawsuits, the CFPB said.” The Bureau alleged “that Hanna’s attorneys are not meaningfully involved in the cases they file against consumers, complaining that the attorneys’ caseloads are too large to allow the attorneys to be meaningfully involved in any of them. [Russell Grantham, “Feds: Marietta debt collector a lawsuit ‘factory'”, The Atlanta Journal-Constitution, 07/26/14 and Jerry T. Myers, “Law Firm Assessed $3.1 Million Fine – The Hanna Consent Order,” Commercial Law World, 01/01/2016]

• The lawsuit contained “allegations that the firm knew or should have known that affidavits supplied by its clients contained false statements. Many of the cases reviewed were filed on behalf of debt buyers.” [Jerry T. Myers, “Law Firm Assessed $3.1 Million Fine – The Hanna Consent Order,” Commercial Law World, 01/01/2016]

• “As part of its high-volume strategy,” the firm “often drops cases when challenged. The firm dropped 40,000 of the 78,000 lawsuits it filed in Georgia in 2009.” [Russell Grantham, “Feds: Marietta debt collector a lawsuit ‘factory'”, The Atlanta Journal-Constitution, 07/26/14]

• The CFPB advocated “to bar Hanna’s debt collection practices and seeks civil penalties and restitution for affected consumers.” As a result of the consent order reached in 2016, “the Hanna firm is now responsible for ensuring that affidavits supplied by its clients are factually correct and were executed properly before a notary public.” The consent order also ordered that the firm cease any “robo-signing” activities and must “confirm that all statements made in clients’ affidavits, such as an affirmation of the affiant’s personal knowledge of the account, are truthful.” The firm was ordered to pay “a penalty of $3,100,000.00 to the CFPB.” [Russell Grantham, “Feds: Marietta debt collector a lawsuit ‘factory'”, The Atlanta Journal-Constitution, 07/26/14 and Jerry T. Myers, “Law Firm Assessed $3.1 Million Fine – The Hanna Consent Order,” Commercial Law World, 01/01/2016]