Virginia Lawyers Weekly VA Lawyers Weekly
Three Virginia residents are filing a federal class action lawsuit against a Virginia law firm for alleged abusive and unfair debt collection practices.
The lawsuit, filed Sept. 9, alleges Hampton-based Senex Law violated federal debt collection laws and tacked on unreasonable attorneys’ fees as they attempted to collect unpaid rent on behalf of landlords around the state.
The tenants are being represented by the Legal Aid Justice Center, the Legal Aid Society of Roanoke Valley and MichieHamlett, a Charlottesville-based law firm. In a statement announcing the suit, the tenants’ lawyers accused the firm of holding a “starring role in the state’s mass evictions.”
“As our state struggles through the economic fallout of the COVID-19 pandemic, Senex Law continues to prey on poor tenants who have few options,” according to the press release.
The Fair Debt Collection Practices Act prohibits third-party collection agencies from harassing, threatening and inappropriately contacting someone who owes money – which is what the tenants’ lawyers are alleging Senex is in violation of.
According to Legal Aid, Virginia landlords contract with Senex to prepare and send notices to tenants whenever a renter is late on a rent payment – which, according to MichieHamlett partner, Kyle McNew – is “perfectly legal.”
However, the lawsuit accuses Senex of violating consumer protections that require debt collectors to identify themselves as such. Instead, they say the company sends out delinquent notices on the letterhead of the property that hired them, sidestepping disclosure requirements in the process.
And with each late payment notice, Senex charges the tenant $30 in attorneys’ fees “though the firm did little more than print and mail a letter,” McNew said.
“Let’s say the rate for a debt collector attorney is $300 an hour. For a $30 attorneys’ fee, that would imply an attorney has spent at least six minutes looking at this file… If you look at the math, that just can’t happen given the number of these things they process,” McNew said.
Kyle McNew
In 2018, the Richmond Times-Dispatch reported that Senex filed four times more eviction lawsuits than any other lawyers in the state, advertising “wholesale pricing on its eviction filings and an online system that lets apartment managers take their tenants to court with a few clicks.”
“[Senex] will send out hundreds and hundreds of these things in a two- or three-day period. If you just do the math, and based on how many attorneys they have working there… They can’t have spent any meaningful time looking at this,” McNew said.
Another federal lawsuit was filed against Senex in July by the Legal Aid Society of Eastern Virginia. On March 27, Congress passed the CARES Act to provide emergency assistance during the COVID-19 pandemic, which imposed a 120-day moratorium on evictions for nonpayment of rent.
According to the July lawsuit, Senex filed eviction accusations against tenants during this time.
“[Senex] attempts to collect from Tenant a check return fee as part of its unpaid rent… which ‘constitute fees, penalties, or other charges to the tenant related to such nonpayment of rent’ that the CARES Act prohibits during the temporary eviction moratorium,’ according to the suit,
This is the second time the Legal Aid Justice Center has represented clients suing Senex. A 2016 suit made similar claims and was ultimately settled and dismissed.
“We think this is a very straightforward claim. Senex is perfectly allowed to service its landlord clients and act as a debt collector – they just have to follow the law,” McNew added. “It’s just cubed by half the way they’re trying to get around it.”
Neither a phone call nor a follow-up email seeking comment from Senex was returned.
