North Huntingdon, PA -- (SBWIRE) -- 01/31/2011 -- Executives at ADMA Solutions, a Pennsylvania-based debt resolution company, are watching a major case against several companies accused of violating both the Fair Debt Collection Practices Act (FDCPA) and the Racketeer Influenced and Corrupt Organization Act (RICO). ADMA President Amy Michalo-Rojas hopes this case can serve as a learning opportunity for clients.

“When debt collectors violate the law – especially as alleged in a massive case like this – we aim to educate both our clients and the general public about what took place and how consumers can avoid becoming the victim of the next unscrupulous collector,” explained Michalo-Rojas.

In this case, a lawsuit was filed against a debt buyer, a law firm, and a processing company alleging all three engaged in “sewer service,” the practice of not serving a summons and complaint and then obtaining a default judgment when the debtors fail to show up in court. The companies were allegedly then able to freeze debtors’ accounts and threaten garnishment to obtain settlements.

The case was filed by eight debtors who claim the fraudulent practices took place over three years and affected more than 100,000 other consumers. The defendants include debt buyer Leucadia National Corp., debt collections law firm Mel Harris, and process server Samserv.

“These defendants are accused of a ‘massive scheme’ to fraudulently obtain default judgments,” explained Michalo-Rojas. “But if the debts were indeed valid, this alleged scheme was especially foolish because they could have pursued collection through legal means.”

Instead, she explained, the entire debt collection industry is watching this case, aware that its outcome could affect debt-buying practices in the future. According to Inside ARM, “The alleged racketeering claims, if proven, would have a chilling impact on how debt buyers validate debt and how collections are pursued through the court system. If proven, many ARM [Accounts Receivable Management] firms would have to re-examine common business practices.”

Michalo-Rojas admits that while every case should be considered a learning opportunity for ADMA Solutions’ clients and consumers in general, it is difficult to provide helpful advice in the face of an alleged conspiracy case of this magnitude.

“We encourage our clients to understand their rights under the FDCPA and learn how to identify and report illegal collection behavior when they see it,” she said. “But as the allegations in this case suggest, even the most aware debtors can be duped when collectors don’t play by the rules.”

About ADMA Solutions, LLC
ADMA Solutions, LLC, is a debt resolution company providing credit card debt relief and debt settlement services to consumers who have significant financial or personal hardships. For more information call 1-888-499-ADMA (2362) or visit htp://www.ADMAdebt.com.