AG Healey Sues Major Debt Collection Law Firm Over Widespread Consumer Abuses
AG Alleges Law Firm Routinely Filed Lawsuits Against Consumers without Proof of Debt Owed; Threatened Consumers on Fixed Incomes
BOSTON – Attorney General Maura Healey has sued one of the largest debt collection law firms in Massachusetts and its two owners, alleging that the firm repeatedly sued consumers for debts they did not owe or debts that were inaccurate. The AG alleges the company violated the state’s consumer protection laws in its pursuit of debts and its use of judicial proceedings.
The complaint, filed on Monday in Suffolk Superior Court against Lustig, Glaser, & Wilson, P.C. (the Lustig Firm) and its principal owners Kenneth Wilson and Ronald Lustig, alleges that since 2011, the Lustig Firm filed more than 100,000 debt collection lawsuits in Massachusetts largely based on inaccurate information about unsubstantiated debts owned by national debt buyers. Many of these lawsuits were filed against consumers whose only source of income was social security or other types of income that were legally exempt from court-ordered payment.
As a result of this high-volume litigation, since 2011, the Lustig Firm has obtained judgments against Massachusetts residents in excess of $125 million and pursued consumers on these judgments.
“We allege that this firm and its owners took advantage of thousands of Massachusetts consumers by demanding money they had no right to collect and on the basis of debts they could not prove,” said AG Healey. “The company used the judicial system to intimidate and harass people, and we are working hard to make sure that this kind of conduct ends and that the company and its owners are held accountable.”
To make their practice possible, the Lustig Firm allegedly relied on simple spreadsheets provided by national debt buyers, which allowed them to process up to thousands of consumer accounts for collection and litigation in a single day. The firm has continued to use these spreadsheets, even though the information provided is often unreliable or incomplete.
The complaint alleges that the Lustig Firm violated consumer protection laws by:
- Collecting exempt income: The Lustig Firm threatened consumers who had exempt income, such as social security, disability benefits, and other public assistance, telling them that failure to pay the debt could result in court-ordered payments or garnishment, despite the fact that those sources of income are protected. The firm pursued consumers, often impoverished and elderly, and served some of them with civil arrest warrants.
- Collecting on inaccurate and unsubstantiated debts: The Lustig Firm frequently demanded payments on old debts without any meaningful proof that the consumer had incurred the debt or that the amount was accurate. Even after learning that their demands against consumers were premised on inaccuracies, the firm regularly continued to pursue consumers.
- Filing deceptive lawsuits against consumers: The Lustig Firm sued consumers without any meaningful attorney involvement in the lawsuits. In some cases, when consumers challenged the suits, the firm was unable to obtain proof of their claims and dismissed the case instead.
- Using false and misleading court filings: The Lustig Firm regularly used sworn statements by debt buyers as proof in its collection lawsuits, despite knowing that these affidavits were often generated by the debt buyer without any meaningful documentation or actual knowledge of the debt.
- Demanding payment of time-barred debts: The Lustig Firm sued consumers without proof that the alleged debt was within the statute of limitations for bringing a lawsuit.
- Demanding payment on dismissed lawsuits: The Lustig Firm continued demanding payments on alleged debts even after cases were dismissed in court for lack of proof. In some instances, the firm resumed phone calls to consumers demanding payment within a week of the court’s dismissal.
This action by the AG’s Office against the Lustig Firm and its owners seeks injunctive relief, restitution to consumers, and civil penalties for violations of the state’s consumer protection laws and debt collection regulations. Consumers with questions or concerns can call the Attorney General’s consumer hotline at 617-727-8400 or file a complaint with the office.
This matter is being handled by Assistant Attorneys General Peter Downing and Jacqueline Rompre and Legal Analyst Sarah Petrie, all of Attorney General Healey’s Consumer Protection Division, Max Weinstein, Chief of the Consumer Protection Division, and Investigator Anthony Crespi.