Five New Jersey lawyers who represent consumers have been named in a racketeering class action suit accusing them of bringing meritless suits against collection law firms in hopes that the firms will agree to quick settlements.
The alleged racketeering pattern was described in the suit as consisting of locating collection letters and securing cooperation of their recipients, constructing unsubstantiated scenarios alleging classwide statutory damages, filing class action suits against the issuers of the letters, and settling the suit for a mid five- or low six-figure attorney fee, according to the suit. The plan’s success has been driven by a structure in which plaintiffs settle early in the litigation for as much as they can get but for less than the case would cost to defend at trial, the suit said.
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