N.Y. Debt Collection Agencies FDCPA Class Action Settlement

A New York debt-buying company, law firm and process server have agreed to pay $54.5 million in order to settle allegations that they conspired in a fraudulent debt collection default judgement scheme in violation of state and federal laws.

Lead plaintiff Monique Sykes, along with three other plaintiffs, filed the debt collection class action lawsuit against Mel S. Harris & Associates, Leucadia National Corp., and Samserv, Inc. over claims that the companies violated the Fair Debt Collection Practices Act (FDCPA) as well as the Racketeer Influenced and Corrupt Organizations Act (RICO), along with New York state laws.

According to the debt collection class action lawsuit, the three companies regularly engaged in “sewer service” where Samserv would fail to serve a summons and complaint seeking payments on debt that Mel S. Harris & Associates and Leucadia purchased, even though they alleged still submitted proof of service to the court.

Once a debtor failed to appear in court, because of the lack of notice, Sykes claims that Leucadia and Mel Harris would then apply for a default judgement, attesting to their personal knowledge regarding the debt owed.

The FDCPA class action lawsuit claims that then the defendants would garnish wages, seize property, damage credit, restrain bank accounts and pressure the low-income Class Members into unaffordable payment plans. 

According to the debt collection class action settlement, there are an estimated 355,000 potential Class Members who were affected by the debt collection scheme. Under the terms of the settlement, Leucadia will pay $46 million, Mel S. Harris will pay $7.9 million, and Samserv will pay $517,500.

UPDATE: On June 29, 2016, the settlement website was updated with the following: “The deadline to file appeals has passed, and no one appealed.  We plan to mail checks in late July.”  Top Class Actions will continue to provide updates as we learn more.  Keep checking back and let us know when you receive a check in the comments section below or on our  Facebook page.

UPDATE 2: On July 30, 2016, the settlement website was updated stating that checks will be mailed in early August.

UPDATE 3: Per the settlement website, the Settlement Administrator began mailing checks on August 5, 2016.  Let Top Class Actions know when you receive a check in the comments section below or on our  Facebook page.

UPDATE 4: On Aug. 8, 2016, Top Class Actions readers started receiving checks worth as much as $4,900 from this debt collection class action settlement. 

Who’s Eligible

The debt collection FDCPA class action lawsuit settlement is open to two Settlement Classes:

• Injunctive Settlement Class Members – includes all individuals who were or could have been sued in any New York court by Mel S. Harris & Associates, LLC (or by any other counsel as directed by Mel S. Harris & Associates, LLC), as counsel for LR Credit. Every Class Member whose alleged debt is or was owned by LR Credit is part of the Settlement Injunctive Class, no matter whether he or she ever made a payment to LR Credit (or any of its subsidiaries).
• Money Settlement Class Members includes every person sued in any New York court by Mel S. Harris & Associates, LLC, as counsel for LR Credit (or by any other counsel as directed by Mel S. Harris & Associates, LLC), and against whom a default judgment was obtained.

All Class Members who are a part of the Money Settlement Class are also Members of the Injunctive Settlement Class.

Members of either Settlement Class who paid money to the defendants or whose judgment was sold to a third party may be entitled to a portion of the Money Settlement if they submit a valid Claim Form.

If you are unsure whether or not you qualify as a Class Member, contact the Claims Administrator at (877) 868-0034.

Potential Award

at least $100.

Every Class Member who paid money to one of the named debt collectors or whose account was sold, will receive at least $100 if they submit a Claim Form. Depending on the number of Claim Forms submitted, Class Members may receive more than $100.

Proof of Purchase

N/A.

Class Members of either Settlement Class who paid money to defendants or whose judgment was sold to a third party may be entitled to a portion of the Money Settlement if they submit a valid Claim Form.

Claim Form

CLICK HERE TO FILE A CLAIM »

Claim Form Deadline

04/07/2016

Case Name

Monique Sykes, et al. v. Mel S. Harris and Associates LLC, et al., Case No. 1:09-cv-08486-DC in the U.S. District Court for the Southern District of New York

Final Hearing

05/11/2016

Settlement Website

www.SykesClassAction.com

Claims Administrator

Sykes Class Action Settlement
PO Box 3145
Portland, OR 97208-3145
877-868-0034

questions@sykesclassaction.com

Class Counsel

Matthew D. Brinckerhoff
Jonathan S. Abady
Vasudha Talla
Debra L. Greenberger
EMERY CELLI BRINCKERHOFF & ABADY LLP

Josh Zinner
Susan Shin
Claudia Wilner
NEW ECONOMY PROJECT

Carolyn E. Coffey
Ariana Lindermayer
Jeanette Zelhof
MFY LEGAL SERVICES INC.

Defense Counsel

Paul D. Clement
Candice Chiu
BANCROFT PLLC

James R. Asperger
Maria Ginzburg
Marc A. Becker
QUINN EMANUEL URQUHART & SULLIVAN LLP

Brett A. Scher
KAUFMAN DOLOWICH & VOLUCK LLP

Miguel A. Estrada
Scott P. Martin
GIBSON DUNN

Ralph C. Ferrara
Mark D. Harris
PROSKAUER ROSE LLP

Michael D. Zimmerman
ZIMMERMAN JONES & BOOHER LLC

Lewis H. Goldfarb
Adam R. Schwartz
McELROY DEUTSCH MULVANEY & CARPENTER LLP

Jack Babchik
BABCHIK & YOUNG LLP