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Law firm closes after investigation.

Byline: Greg Bolt The Register-Guard

A Eugene law firm that was the target of almost 100 complaints over its debt collection practices has been shut down following an investigation by the Oregon attorney general's office.

Derrick McGavic, the founding partner of the firm McGavic & Finney, also was ordered to surrender his law license and agreed never to practice law or work as a debt collector again. He also was required to pay $70,000 to cover the state's investigation costs.

The investigation came after scores of people complained about the tactics used by McGavic and members of the firm to collect on unpaid debts owed to the firm's clients. The complaints alleged that the firm failed to clearly disclose required information about the debts and that creditors repeatedly contacted debtors after they asked in writing not to be bothered.

A call by The Register-Guard to a number listed as McGavic's home phone reached an answering machine that was full and would not accept new messages. McGavic's name has been removed from the state bar directory, but he had been practicing law in Eugene since at least the late 1970s.

An attempt to reach McGavic through his attorney also was unsuccessful.

The agreement to shut down the law firm was negotiated with the office of Oregon Attorney General John Kroger. As part of the deal, McGavic does not admit any wrongdoing but agrees to pay the assessment and take the other steps, including closing the firm and surrendering his license.

According to the attorney general's office, McGavic already was being investigated by the state bar association when prosecutors were conducting their investigation.

Kristan Finney, McGavic's partner, also was part of the settlement. She was allowed to keep her law license but is subject to strict provisions regarding the conduct of any future legal work involving debt collection.

Finney's attorney released a statement by Finney in which she denied violating the law.

"Ms. Finney has always made every effort to comply with the requirements of state and federal law in her practice," said the statement issued by Eugene attorney Jet Harris. "Ms. Finney denies the allegations stated in the attorney general's press release, and disagrees with the attorney general's characterization of the facts and his conclusions. Ms. Finney has resolved this matter by agreement because it allows her to continue her practice and to serve her clients. Ms. Finney has always been and remains committed to following all laws and standards concerning the collection of debts."

Debt collection firms generated the fourth-highest number of consumer complaints to the state Justice Department last year, according to an attorney general's office report.

"At a time when many Oregonians are struggling to manage their debt, the Department of Justice is committed to holding unscrupulous debt collectors accountable," said Keith Dubanevich, chief of staff and special counsel to Kroger.

According to the attorney general's office, McGavic & Finney specialized in representing national debt collectors that buy large amounts of defaulted consumer debt, often for pennies on the dollar, and then attempt to collect. People had complained that the firm ignored debtor rights and protections provided under state and federal debt collection laws.

The state found a pattern of falsifying fee affidavits in motions for default by claiming services McGavic did not perform.

McGavic also is alleged to have arbitrarily increased fees based on the amount of money claimed or where the claim was filed.

Another allegation is that McGavic purposely misidentified or confused the identity of creditors to delay payment and thereby increase the fees and interest he could charge. He was accused of repeatedly calling debtors who had exercised a right not to be contacted further and did not provide specific information about the debts when it was requested.
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Title Annotation:Local News; The move follows an agreement with the state attorney general's office acting on complaints
Publication:The Register-Guard (Eugene, OR)
Date:Mar 18, 2011
Words:623
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