Oregon Attorney General John Kroger's office announced an agreement Thursday that shuts down Eugene, Ore.-based law firm McGavic & Finney PC, which was the subject of dozens of complaints about its collection practices. In addition to closing down the firm, the settlement requires founding partner Derrick E. McGavic to pay $70,000 and surrender his license to practice law.
McGavic & Finney specialized in representing bad debt buyers, collectors that purchase defaulted consumer debt for pennies on the dollar.
Consumer complaints filed with the Oregon Department of Justice accused McGavic of ignoring debtor protections and rights afforded under the Oregon and Federal Debt Collection Protection Acts. For example, McGavic allegedly misidentified or purposefully confused the identity of creditors in documentation to delay consumers’ response and thus increase fees and interest payable to McGavic and his clients.
Notices issued by McGavic allegedly omitted specific information related to the amount of the defaulted debt and failed to provide proper verification of debts when requested by consumers. Similarly, McGavic allegedly repeatedly called debtors who had requested in writing not to be called.
The Department of Justice’s investigation also uncovered McGavic's pattern of falsifying fee affidavits in Motions for Default Judgments by claiming services he did not perform. Also, McGavic allegedly provided his office staff with a schedule to be used to arbitrarily increase the fees claimed - depending on the amount of money claimed or the venue of the action.
The agreement filed last week in Lane County (Oregon) Circuit Court further requires McGavic to resign from the Oregon State Bar. He is prohibited from acting as a debt collector or operating a law firm or a collection agency in Oregon.
Kristan Finney, also with the firm, may continue to operate under a different business or firm, subject to numerous stringent injunctive provisions specified in the settlement agreement.
