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Tuesday, June 11, 2024 | Back issues
Courthouse News Service Courthouse News Service

Legal aid firm goes after California ‘junk’ debt buyer for illegal debt collection practices

A lawsuit filed in state court on Wednesday accuses debt collection company Achievable Solutions of manipulating the courts to obtain default judgments using fabricated proofs of service.

OAKLAND, Calif. (CN) — Bay Area Legal Aid is taking debt collector Achievable Solutions, Inc. to court over allegations of abuse and illegal debt collection practices that “exploit and manipulate the normal operation of California’s overburdened courts” for a quick payday.

The complaint filed Wednesday in Alameda County Superior Court said ASI, a company that purchases old debts from creditors, conspired with lawyers and and process servers to file collections lawsuits and then deliberately fail to notify the debtor defendants that a lawsuit has been filed against them, as required under California law.

ASI then files a proof of service that falsely attests that the defendants have been properly served with a summons and copy of the complaint. When the defendants inevitably fail to show up in court to defend themselves, ASI files— and usually obtains— a default judgment against them. A 2020 Pew study says default judgments, where a judge rules in favor of a creditor because the consumer has not responded to the case, are "alarmingly common." In extreme cases, consumers can be arrested and jailed because of a debt collection judgment.

Another 2020 study from the Center for Responsible Lending says debt collectors may have seized more than $700 million between 2012 and 2017 in California's ten most populous counties, and that "most debts purchased by debt buyers are unsubstantiated."

"I think this is a pretty egregious example but unfortunately we see a lot of stuff like this," Noah Zinner, managing attorney with BayLegal’s consumer team told Courthouse News. He said companies like ASI buy old debt from credit card companies for pennies on the dollar, often without authentication of the amount owed. Judgments automatically entered against people who don’t know they are being sued by ASI “can be enforced in perpetuity and renewed every ten years,” he said. "For low income wage workers who are living paycheck to paycheck it can be the difference between making rent and not."

ASI’s business filing with the secretary of state names Takashi Cheng as its incorporator and president, and Kiona Tchan as its current chief financial officer.

Cheng is also named as the agent for A-United Attorney Service, and its website lists filing documents, notary and messenger services and court research among its business offerings.

A-United Attorney Service was purchased in 2018 by Pasadena-based defendant SueYa, Inc. "SueYa makes it affordable and easy for anyone to file a lawsuit, evict a tenant or enforce a judgment in minutes,” its website touts. The company did not reply to an email seeking comment.

The complaint also lists as defendants a process server named James Crawford, Woodland Hills attorney Hilal Hasic, and Harris Law Group — a firm owned by attorney Wendy Harris, whose bar license was suspended for a year in April 2021 following disciplinary charges by the California State Bar.

Neither Harris nor Hasic returned calls seeking comment Wednesday.

“There is ample evidence that the proofs of service filed in the challenged debt collection actions are deliberately fabricated,” BayLegal’s lawsuit says, noting that 36 of the proofs of service ASI filed in San Francisco Superior Court are signed by James Crawford with an “x,” and names the person served as either a John or Jane Doe. The descriptions of the people served are sparse and uniform, cataloging them as either “male Hispanic” or “female Hispanic” in their “late 30’s” or “late 40’s,” with “brown eyes” and having “black hair or brown hair.”

“If you look at ASI’s lawsuits individually, their claims might seem plausible, but when you look at what they file across a number of cases, the fraud is clear,” Zinner said.

BayLegal believes Crawford is likely a fake person “whose name is merely stamped on ASI’s proofs of service to provide the illusion that defendant consumers have been properly served.”

"He’s got an 'x' for signature, first of all, and that’s a problem," Zinner said. "And he's allegedly completed super human tasks by being in the same place at the same time and driving all over the Bay area in a zig-zag pattern."

BayLegal says ASI’s certifications of proper service are "not only extraordinarily improbable, but often physically impossible,” as Crawford was said to have traveled great distances in less than one hour on March 15, 2020 to attempt service at addresses that are dozens of miles apart. For example, he allegedly drove 19 miles to serve a person in Sunnyvale at 7:10 am on March 15, while simultaneously attempting service at another address 30 miles away in Pleasanton.

The lawsuit says ASI and its alleged cadre of malefactors are taking advantage of the overburdened courts.

"Defendants know that courts rely on proofs of service signed under penalty of perjury. defendants assume that courts will not cross-reference their allegations of proper service to those in other cases and will certainly not cross-reference their activities in other jurisdictions,” the lawsuit says. “Thus, defendants exploit and manipulate the normal operation of California’s overburdened courts to obtain fraudulent default judgments with only the barest effort at subterfuge.”

"The law says the courts are supposed to be vigilant about this. But am I surprised? I think the courts are totally overwhelmed," Zinner said. "I think the courts are being scammed as well."

The non-profit legal services firm says it first became aware of ASI’s practices when their lawyers were approached by John Chambers, who attended one of their legal clinics. Chambers had a judgment entered against him, though he was never served with a summons and only learned about the case when he received notice of the judgment in the mail.

Like many of the other proofs of service ASI filed, Chambers is described as a Hispanic male in his 40s with black hair and brown eyes.

Chambers is in fact, white, and 54 years-old.

Bay Legal seeks an order permanently barring the defendants from continuing to violate California’s business and professions code, and an injunction preventing ASI from enforcing the judgments it obtains.

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Categories / Business, Consumers

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