NYS Attorney General Investigates Debt Collection Industry

By Peter Iglinski

Rochester, NY – New York State Attorney General Andrew Cuomo is seeking to throw out over $100,000 in judgments against consumers as part of a major investigation into the debt collection industry.

Cuomo accuses the Long Island company, ALP, of failing to present legal papers in those cases, notifying the individuals that they were in default. Because legal papers were never delivered, Cuomo says default judgments was entered against the individuals. Cuomo says companies like default judgments because they give them tremendous leverage against individuals. He says consumers' accounts are frozen and there are court orders against them. He likens it to extortion.

Cuomo says individuals have a right to their day in court.

Cuomo's office says about 6800 faulty judgments were filed in the Rochester area.

The lawsuit names 35 law firms, three of which are located in Rochester. They are Zwicker and Associates; Relin, Goldstein and Crane; and Woods, Oviate and Gilman. Cuomo says an investigation is continuing into whether the firms knew--or should have known-- that there was a problem. Two firms have not commented. But Woods, Oviatt and Gilman issued a statement noting that the attorney general has not accused the law firm of any unlawful conduct, and until the firm has a chance to review the legal papers, there will be no further comments.

Cuomo says he has never before seen a scam of the magnitude of the one involving ALP. His office is also investigating whether the case is part of a larger scandal involving process servers.