The Wall Street Journal has called out a collector for filing more lawsuits during the pandemic than before, saying the firm has “cemented its reputation as a maverick” in the accounts receivable management industry, because most of the company’s competitors filed fewer lawsuits once the pandemic hit.
The collector – Sherman Financial Group – filed 52% more lawsuits during the last nine months of 2021, compared with the same period a year earlier, across five state court districts, according to the report, which noted that the overall total number of lawsuits in those districts dropped 24% during the pandemic.
A spokesman for the company said the company owned more debt during the pandemic, and that is why it filed more lawsuits. When looking at the number of lawsuits relative to the number of accounts it has, the percentage of lawsuits that were filed during the nine-month period in question was actually less than the number filed during the same period a year earlier.
“In addition to drastically reducing its suit filing rate, Resurgent implemented many consumer-friendly policies during the pandemic,” said David Wells, the spokesman.
The company purchased 60% more debt in 2019 than the prior year, which increased the number of debts for which it may have had to potentially sue to recover. Wells said that Sherman spent “millions of dollars less on lawsuit fees” than its competitors, indicating that it filed fewer lawsuits.
Like many media reports that paint collectors as being too aggressive when filing lawsuits, the WSJ’s article includes information about a couple of individuals who have been sued by Sherman. One woman who was sued quit nursing school to take care of her father and now does not make enough money to pay her credit card debt. But the article also states that the woman “got letters seeking repayment for years before she was sued, which she ignored, assuming they were coming from scammers.” The woman also did not respond to the lawsuit that was filed against her.
Ben Navarro, the owner of Sherman, gets the deep-dive treatment in the article, including his failed bid to purchase
