A pair of consumer protection agencies announced Thursday that a $60,000 settlement was reached in a case against a Los Angeles-based collection company for court judgments.
The Los Angeles County Department of Consumer & Business Affairs and the Office of the Los Angeles County Counsel Affirmative Litigation & Consumer Protection Division’s civil complaint against Van Nuys Financial resolves claims in a 2019 lawsuit alleging the company took advantage of consumers who had won money judgments in small claims court, but who had not been able to collect those judgments.
Contacting them through unsolicited telephone calls and direct mail, Van Nuys Financial encouraged consumers who had prevailed in small claims court to assign their unsatisfied monetary judgments to the firm, according to the DCBA.
After realizing the difficulty of collecting their judgments, consumers entered into written contracts with Van Nuys Financial and assigned their judgments to them, the DCBA alleged. In exchange for the assignment, Van Nuys Financial kept a percentage of the money collected, usually 30 to 40%, and would promise to remit the rest to the consumers, according to the DCBA.
The lawsuit alleged false advertising and misrepresentation because of Van Nuys Financial’s alleged pattern and practice of collecting on an assigned judgment but failing to notify consumers that they had done so.
“The Small Claims court allows all people in Los Angeles County to seek justice on equal footing,” said DCBA Director Rafael Carbajal. “These days, every dollar makes a difference for the consumers we serve.”