Cohen & Krassner, a Manhattan and New Jersey law firm specializing in debt collection, will pay more than $26,000, including legal fees, to settle a class action accusing the firm of sending misleading collection letters. Eastern District Judge Kiyo A. Matsumoto (See Profile) approved the settlement in Garland v. Cohen & Krassner, 08-cv-4626. Under the agreement, the firm will pay $6,650 into a fund to be distributed to more than 2,500 class members, and will pay $3,000 to Theresa Garland, the lead plaintiff. The firm will also pay $16,710 in legal fees. Ms. Garland had asked for $25,000 in fees for her attorneys at the Bromberg Law Office, but Judge Matsumoto ruled on Tuesday that some of the hourly rates of her attorneys were too high and some of the work they did was duplicative.
Ms. Garland filed the suit in 2008. She alleged that Cohen & Krassner had sent her and others similarly situated substantially identical debt collection letters violating the federal Fair Debt Collection Practices Act. Specifically, she claimed the letters failed to tell recipients the names of their creditors and that they had 30 days to make written requests to verify the debts. She also claimed the letters threatened to sue within that 30-day period or gave the impression that a lawsuit had already been filed.
