Debt Collection Attorney and Firm Censured Over Six Cases

A state appeals court in New York last week decided to publicly censure a debt collection attorney and his law firm over the practices it used in the legal collection channel. The long-running disciplinary action was over conduct in six debt collection cases over a three year period.

A five-judge panel in the Second Judicial Department of the Appellate Division of the State Supreme Court of New York upheld previous misconduct charges stemming from an action launched by the state’s Grievance Committee in 2008. The matter involved complaints from six separate consumers regarding debt collection cases filed by law firm Cohen & Slamowitz between 2003 and 2006.

The highlighted cases showed what the committee said was a pattern of misconduct on the part of the firm. Primarily, the firm continued to go after consumers even after information was shared that their debts had been satisfied.

The judges last week said that public censure was appropriate in the matter, writing, “…the respondents had information at their disposal that they were pursuing the wrong debtor; continued to pursue a collection matter even after the matter was concluded; and restrained a debtor’s bank account despite improper service and knowledge that the debt had previously been satisfied.”

The panel noted that the firm had “undertaken efforts to reform their collection practices by adding a compliance department and other safeguards to prevent future misconduct” mitigating the disciplinary decision.

Cohen & Slamowitz’s principal, David A. Cohen, was included in the censure.

An attorney representing the firm told The New York Law Journal that “the decision sets a dangerous precedent in that the Court rejected the expert testimony and seems to have adopted the position that a lawyer collecting a debt has an enhanced duty to the debtor, which is contrary to the FDCPA [Federal Debt Collection Practices Act] and which dilutes the lawyer’s obligation of zealous advocacy to the client.”

In arguments before the panel, the firm called an expert witness, Ronald M. Abramson, to testify on its behalf. According to Abramson, the firm could not assume that what was being told to them by the debtors was correct, and that the onus was not upon the respondents to establish the validity of the debtors’ claims absent written notice from the debtors, within 30 days, following their presumed receipt of a validation letter pursuant to the FDCPA. Abramson testified, further, that in the absence of FDCPA violations, there could be no ethical violations. However, on cross-examination, Abramson conceded that there did not have to be a violation of the law for there to be professional misconduct.

Abramson, an ARM attorney and member of the Grievance Commission of Maryland, also noted that he was “impressed” by the compliance department set up by the firm in the intervening years since the matter was launched.