Kroger, law firm reach agreement

Keith Loria Mar. 18, 2011, 12:18pm


SALEM, Ore. (Legal Newsline) - Oregon Attorney General John Kroger announced on Thursday that he has reached a $70,000 settlement with a law firm that allegedly engaged in unscrupulous debt collection practices.

McGavic & Finney PC allegedly ignored debtor protections and rights afforded under the Oregon and Federal Debt Collection Protection Acts.

Under terms of the agreement, founding partner Derrick E. McGavic must pay $70,000 and surrender his license to practice law.

"At a time when many Oregonians are struggling to manage their debt, the Department of Justice is committed to holding unscrupulous debt collectors accountable," Keith Dubanevich, chief of staff and special counsel to Attorney General Kroger, said.

The Department of Justice received over 90 complaints about McGavic and his partner Kristan Finney. The pair specialized in representing national debt collectors that would purchase defaulted consumer obligations in massive quantities on the secondary market, Kroger says.

The suit alleged that in documents he sent, McGavic misidentified or knowingly confused the identity of the creditors to delay the responses from consumers, which added to the fees and interest they owed.

It was also alleged that McGavic purposely left out important information concerning the amount of the defaulted debt and often failed to provide the proper verification of debts when consumers requested them. He also allegedly called debtors who had asked to be notified in writing and not on the phone.

Additionally, McGavic allegedly provided false fee affidavits in motions for default judgments by claiming services that were never performed. He also allegedly gave his office staff a schedule to work from that was arbitrarily used to increase the fees claimed.

According to the agreement, McGavic must also end acting as a debt collector or operating a law firm or a collection agency anywhere in Oregon.

Finney is allowed to operate under a different business or firm as long as she meets numerous stringent injunctive provisions that were spelled out in the settlement.

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