Law Firms

Debt collection law firm pays $1M in restitution to settle state suit

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The largest debt collection law firm in Massachusetts has agreed to pay $1 million and to change its practices to settle a lawsuit filed by the state.

Lustig, Glaser & Wilson will pay the attorney general’s office for restitution to consumers, according to a press release by Massachusetts Attorney General Maura Healey. The settlement resolves allegations that the law firm pursued cases based on inaccurate or incomplete information. The Boston Herald, the Boston Business Journal and Inside ARM have stories.

The attorney general’s lawsuit had claimed Lustig Glaser relied on computerized spreadsheets provided by national debt buyers that allowed it to process thousands of consumer accounts for collection in a day’s time.

Lustig Glaser has changed its practices because of the settlement and will:

• Disclose to consumers that certain income is exempt from collection.

• Verify the accuracy of a consumer’s debt before attempting to collect.

• Refrain from suing unless a lawyer has meaningfully reviewed documentation and determined there is sufficient evidence to proceed.

Lustig Glaser issued a statement published by Inside ARM: “This agreement acknowledges that there are no findings of liability or wrongdoing on the part of LGW, no finding of harm caused to consumers and it does not impose any penalty on the firm. LGW felt it was in the firm’s best interest to end the expense and uncertainty of ongoing litigation.

“Throughout this process LGW cooperated fully and transparently, producing tens of thousands of pages of documents and answering all relevant questions. LGW has a long track record of employing best practices in consumer and commercial debt collections.

“The agreement reflects existing policies and procedure that have been in place at LGW for a number of years, and outlines new provisions and practices not currently mandated by existing law or regulations, to ensure that the needs of certain consumer’s facing particular hardships can be fairly addressed. LGW is fully committed to adopting the new practices.”

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