A New York man who claimed a collection agency and law firm illegally garnished his wages under a state court default judgment cannot pursue federal claims against the firms, according to a ruling by a U.S. district judge in Buffalo.

Christopher McCrobie, a resident of Erie County in New York, accused collection agency Palisades Acquisition and law firm Houslanger & Associates, in a lawsuit filed last year, of routinely trying to collect debt without proper documents. Palisades is part of publicly traded company Asta Funding Inc., which buys unpaid consumer debts such as credit card debts from original creditors and other debt buyers. 

The court ruled there was insufficient evidence supporting McCrobie's allegations.

In another New York case involving Asta Funding, the company agreed in April 2015 to settle charges brought by New York Attorney General Eric T. Schneiderman’s office that it pursued improper debt collection tactics against hundreds of consumers. The company vacated approximately 300 judgments totaling more than $1.7 million as part of a settlement with New York Attorney General Eric T. Schneiderman’s office. It also agreed to reform its collection practices and pay civil penalties and costs totaling $100,000.

According to regulators, Asta Funding had been suing consumers in the state and obtaining uncontested default judgments against people who failed to respond to the lawsuits, even though the underlying claims were untimely under New York law.  


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