Judge Approves $60 Million Settlement in Debt Collection Suit

A federal court approved the settlement on behalf of  New Yorkers who alleged fraudulent debt collection practices.  The $60 million settlement in the case, captioned Sykes v. Mel S. Harris and Associates LLC, No. 09 Civ. 8486 (S.D.N.Y), is  the largest ever of its kind.  The settlement should also lead to the unprecedented vacating of approximately 195,000 court judgments and result in the forgiveness of over $1 billion in alleged debt. Plaintiffs’ lawsuit alleged that that Defendants used fraudulent practices to file debt collection lawsuits, obtain default judgments, and then collect on those judgments.

Judge Denny Chin found that the settlement is a “remarkable resolution” to “hard fought litigation” that will bring “extraordinarily meaningful benefits to tens of thousands of individuals.”  He concludes that the settlement will have an “immediate and enormously positive impact on the lives of many.”

The class is represented by ECBA attorneys, Matthew Brinckerhoff, Debbie GreenbergerElizabeth Saylor, and Jonathan Abady,  along with co-counsel MFY Legal Services and the New Economy Project.   Read more about the settlement in coverage by the New York Times, the Nation, the NY Law Journal, the NY Post, the Democrat & Chronicle, the Daily News and NY 1.

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