Embattled Collection Law Firm Provides More Detail on Lawsuit

A debt collection law firm and agency in Minnesota has provided a second response and update to allegations that one of its representatives used extremely harsh language and tactics with a disabled veteran over the handling of a judgment enforcement. The allegations were made public when a story about the consumer’s lawsuit went viral.

The ARM firm, Gurstel Chargo, responded last week after the press jumped on the story. In that statement, the firm said it asked for additional detail from the consumer and his attorney.

Late Friday, Gurstel sent a statement to insideARM.com that was also posted on its corporate web site. The company said that the plaintiff’s attorney had provided the additional information it asked for and that it could find no record of the offending phone call:

Yesterday, plaintiffs’ attorney provided the cell phone number on which Mr. Collier claims to have received the call and indicated that the call was made after the May 24, 2012 hearing referred to in the Complaint.  As a matter of standard procedure, Gurstel Chargo records and retains record of all phone calls placed from the firm to consumers.  A thorough review of the Gurstel Chargo phone database reveals that no call from Gurstel Chargo to the number provided by plaintiffs’ attorney was made at any time from the hearing date through the filing of this lawsuit.

In addition, the persistent reporting by the media that the Collier’s funds were illegally garnished is not accurate. The funds were properly and legally garnished.  Only upon documentation being provided by the consumer, Mr. Collier, indicating the funds in his account were exempt, did it become proper to extinguish the garnishment.  Gurstel Chargo did not and could not have known the funds were exempt in the absence of this documentation.

Gurstel Chargo has filed its Answer to the Collier federal court case denying the allegations of wrongdoing. In particular, Gurstel Chargo’s Answer states that the despicable phone call allegedly made to Mr. Collier by a Gurstel Chargo employee did not occur. Since Gurstel Chargo filed its Answer, the plaintiffs’ attorney has walked back plaintiffs’ allegations by filing an Amended Complaint correcting errors made in the initial set of allegations.

The original complaint filed by Collier does appear to have been amended. An entire passage where he alleged a run-in in the parking lot of the court building has been removed.

The lawsuit was filed by Michael Collier, an Army veteran that had been declared “100 percent disabled” due to head and spine injuries, and his wife. In it, they claim that law firm and debt collector Gurstel Chargo failed to obey a court order to unfreeze exempt funds in the Colliers’ bank account. The law firm had initially won a garnishment order from Collier over his wife’s unpaid student loans, prompting his credit union to freeze a savings account. But a judge later determined that the funds were exempt from garnishment and ordered the credit union to unfreeze the account and for Gurstel to release the money.

When the Colliers approached Gurstel about the order, a representative of the firm allegedly said that the couple would need to sue to get the money back. Later, Collier called Gurstel to again inquire about the funds and was again told that they would have to sue to get it back. When Collier pointed out that the funds were ruled to be exempt, things allegedly got very nasty very quickly.

But Gurstel is now saying that phone call may have never happened. A detailed description of the call still remains in the amended complaint.

The firm also notes that many in the press have been getting the facts wrong in the case. The statement concludes:

Now that the truth is beginning to emerge, Gurstel Chargo is concerned that false claims and statements about the firm and its employees are being wrongly perpetuated. The allegations in the Complaint are simply not true.  Gurstel Chargo consistently and continuously trains its employees, and stresses its expectation that all of its team members conduct the firm’s business in a respectful and professional manner at all times. Nothing to the contrary occurred in this case.