DETROIT (Legal Newsline) – A class action lawsuit filed in Michigan federal court claims debt collectors used affidavits with forged signatures when filing lawsuits.
Saundra Ryan filed a class action lawsuit on behalf of herself and others similarly situated in the state of Michigan on May 24 against Encore Capital Group Inc. and its subsidiaries Midland Funding LLC, and Asset Acceptance.
The complaint alleges the defendants filed lawsuits against debtors supported by template affidavits with “robo-signed” signatures of a notary, Karli Peterson, whom is also a named defendant.
In its preliminary statement, the complaint quotes Judge Kirsten Nielsen Hartig stating during a hearing, “Counselor, your affidavit looks like it was forged; I’ve got to be real honest with you. Plaintiff, I’ll be honest with you, the signatures look markedly different and it does suggest to me that Affiant did not, in fact, sign the affidavit.”
In that case, Midland Funding was the plaintiff suing Saundra Ryan, allegedly using an affidavit containing "tally marks" for a notary signature to support the lawsuit. The judge agreed that the notary’s signature looked forged when compared to the copy of the notary’s signature filed with the state of Minnesota.
Now, Midland is the defendant facing a class action lawsuit filed by the very same debtor.
Ryan’s complaint contends the defendants use the forged notary signature on affidavits generated from templates in Minnesota and send them to attorneys in various states to support lawsuits filed against debtors in court. The lawsuit states the defendants violated the Fair Debt Collections Practices Act (FDCPA), Regulation of Collection Practices Act (RCPA), and Racketeer Influenced and Corrupt Organizations Act (RICO).
The lawsuit claims “hundreds of thousands of default judgments are being taken against Michigan consumers using the 'asset affidavits' that are notarized by someone falsely claiming to be Ms. Peterson and on behalf of defendants.”
Ryan also included embedded images of the defendants’ legal documents depicting blank boxes printed on signature pages with three attorneys’ names next to each. Ryan alleges one of the three attorneys listed only checks the blank box next to his or her name, and signs off on the lawsuits without reviewing any documents or validating the debt before taking legal action, as required by law.
“These attorneys had to attest to a certain language and they didn’t," Nicholas Reyna, attorney for the plaintiff told Legal Newsline. "There is precise language that must be attested to in the state of Michigan and they didn’t. They used a check box. They were trying to circumvent a lot of requirements.”
“The defendants load up the complaint with superfluous and self-serving dialogue that is not required but is written to fool the reader, consumer or state court into the authenticity of the claim when there is nothing in the way of proof or the written instrument of credit card holder agreement attached to the lawsuit as required by law,” the complaint reads.
“All of these documents were created in Minnesota and sent to various debt collection firms in other states since [defendants] have to file lawsuits where the debtors live," Reyna said. "They are using that forged affidavit as a basis for debt collection lawsuit.”
The lawsuit requests class certification, actual damages, statutory damages including $500,000 or 1 percent of the net worth of defendants for the FDCPA claims, damages for the RCPA claims, court costs and attorneys fees, in addition to treble and punitive damages for the RICO claims and a trial by jury.
Reyna said based on the defendants’ market value, he estimates it is a billion-dollar corporation. He said that valuation matters because under the FDCPA, the punitive language permits a higher damage amount based on its worth for intentional acts, such as forging documents. He said he thinks the jury will see the defendant was willful and acted intentionally when forging the affidavits and it will award punitive damages.
“We are hopeful we will have a good resolution. We hope the message other agencies take from this lawsuit is that they will look at the conduct of [the defendants] and understand it’s not the way to collect debt. We hope they will be honest in court and see this as a good reason not to commit an act of fraud,” Reyna said.