In our industry it is impossible to ignore the lawsuit filed by the CFPB against the Law Offices of Frederick J. Hanna and Associates, PC. I’d like to offer my opinion of this industry-shaking action by our government.
I am not a lawyer. So, I am unqualified to offer any opinions about the legal efficacy of the lawsuit itself. But, I have spent my entire professional career designing and writing software in pursuit of greater accuracy as well as efficiency in collection-specialist law offices. So, I do feel qualified to comment on “automation.” And I have read the complaint.
In the complaint, two paragraphs absolutely jumped off the page at me. Paragraph 16b says “The Firm directed its attorneys to rely on an automated system and support staff research to determine whether consumers had sought relief in bankruptcy or whether their debts were barred by limitations;” and 16c says “The Firm directed its attorneys to rely on an automated system and support staff research to determine legally significant facts such as each consumer’s date of initial contract and the date the consumer last made a payment.”
Wow. I mean, WOW! Attorneys have support staff doing research? Goodness, me. How long has this kind of abuse been going on? And, they rely on automation to determine if consumers have filed for bankruptcy protection? Oh, my. Where will the abuse end?
In all seriousness, do the government lawyers who signed and filed this complaint actually believe that bankruptcy records are kept on paper in some hall of records somewhere? And, do they seriously believe that the research is only legitimate if a licensed attorney personally goes to this nonexistent hall of records to personally search through paper records to determine who has filed for bankruptcy protection? Do these same legal geniuses actually not know that records such as dates and amounts of contracts and payments are now kept electronically, beginning with the original credit grantor? Do these Clarence Darrow wannabes think that banking and credit card transaction records are in a paper file somewhere, with teams of bookkeepers updating payments to a paper ledger card every day? Or, do they just not care about facts and reality?
Not only are these types of records now stored electronically, but “using automation” brings a level of accuracy that would be impossible if these records were kept only on paper, and had to be researched manually. Yet, somehow, our government apparently feels that automation means consumer abuse, when the exact opposite is true when it comes to searching and scrubbing bankruptcies.
From my perspective the absurdity of the allegations regarding the use of automation and staff research in this lawsuit cannot be overstated. Without citing a single actual abuse (in my layman’s eyes), this suit implies that because an office is efficient they must be abusing consumers! The CFPB apparently spent many hours in the Hanna office, observing the extent to which they go to try and ensure that they are reaching out to the correct consumers with correct information, and attempting to engage consumers with efforts ranging from letters to phone calls, and finally to filing suits. And, remarkably, after observing the care and effort and significant expense undertaken by the firm to ensure proper, legal and ethical behavior, the government’s conclusion is that consumers are being abused because the firm uses automation and staff research!! How does that even make sense to anyone? Either there is abuse and misconduct or there is not. How can efficiency alone constitute improper behavior?
I am not an anti-government zealot. Far from it. But to me this is government run amok. Frankly, the lawyers who signed this complaint should be embarrassed. The “research” reflected in this complaint is so shoddy and simply wrong as to be laughable. It makes me wonder; did the government lawyers who signed this complaint do all the research themselves, or were they aided by “support staff” to do the preparation? If Mr. Hanna’s office conducted themselves with the same disregard for facts and reality as the government has done in this case, they would deserve to be investigated and punished. But, Hanna does NOT behave this way. Like all other responsible collectors they do just the opposite; they expend lots of time, money and energy in a never ending effort to be accurate and ethical. The result? They get blindsided by government lawyers who make absolutely no effort to be accurate and apparently could care less. I need a new Irony Meter.