A Waltham law firm used unfair and deceptive practices to collect debts from hundreds of thousands of Massachusetts consumers in recent years, in one instance taking out a civil arrest warrant against a 90-year-old woman, Attorney General Maura Healey alleged in a complaint filed this week in Suffolk Superior Court.
The firm, Lustig, Glaser & Wilson PC, has filed 100,000 lawsuits against Massachusetts residents and collected more than $110 million from them since 2011, preying on some of the state's poorest people, Healey alleged in court documents.
The firm relied on an automated system to identify cases to bring to court, often with little review, and in many instances collected debts based on inaccurate or incomplete information, according to the complaint.
"The company used the judicial system to intimidate and harass people," Healey said in a statement. "This firm and its owners took advantage of thousands of Massachusetts consumers by demanding money they had no right to collect and on the basis of debts they could not prove."
The firm's owners, Ronald E. Lustig and Kenneth C. Wilson, who were named in the complaint, did not return calls for comment Tuesday.
Mark Smith, the lawyer representing Lustig, Wilson, and their firm, said his clients cooperated with Healey's investigation and "look forward to being vindicated in court."
The debt-collection industry and the law firms that pursue collection cases have come under scrutiny in recent years. In July 2014, the federal Consumer Financial Protection Bureau sued a Georgia firm, Frederick J. Hanna & Associates, alleging that it operated as a debt mill, churning out 350,000 lawsuits against consumers who may not have owed any money.
Roger Bertling, director of the Consumer Protection Clinic at Harvard Law School, said that the practices alleged by Healey and the consumer protection agency are fairly common.
"Debt-collection work is still the wild, wild West," he said. "The system is built on volume and getting in and getting out very quickly."
Debt-buying companies purchase uncollected debt from credit card companies and banks, then farm out the collection work to law firms in each state, paying the law firms a percentage of the amount that they collect.
Typically, debt collectors take up to a 30 percent cut of the money they get, according to consumer groups.
It is unclear how much Lustig, Glaser & Wilson made collecting these debts.
Lustig, Glaser & Wilson is one of the largest debt-collection litigators in the state.
In November, the Massachusetts Division of Banks notified the firm that it must register and obtain a debt collector's license, a ruling that Lustig, Glaser & Wilson is fighting. Earlier this month, the firm sued the banking commissioner in Suffolk Superior Court, arguing that the regulatory agency had exceeded its authority and state law.
According Healey's complaint, Lustig, Glaser & Wilson downloaded large computer files from debt-buying companies that listed debts and debtors in Massachusetts.
But the spreadsheets provided few details about payment histories, the original contracts, ownership of the debt, or disputes over the amounts owed — all of which would be necessary to establish and verify the debts, according to the complaint.
Within a few days of the download, the law firm would send so-called demand letters, and then start robocalls, according to court documents.
The law firm would push consumers to pay the debts, even when their only income was from Social Security or veterans and unemployment benefits, all of which are exempted by law from debt collection, the lawsuit said.
In one case, the firm attempted to set up automatic debt payments from the bank account of a consumer whose sole source of income was $700 a month in disability benefits, Healey alleged.
If consumers failed to pay, Lustig, Glaser & Wilson lawyers filed complaints in district courts. Since many consumers didn't show up to contest the complaints, the law firm won default judgments without having to provide proof.
The judgments allowed the law firm to garnish wages for the debts and to seek civil arrest warrants, according to the attorney general's complaint.
"This firm and its owners made a living off of taking unfair advantage of Massachusetts consumers," Healey said, "many of whom could not afford a lawyer or were unfamiliar with the legal system."
Healey's office is seeking to have civil penalties levied against the law firm, along with an order that it make restitution to consumers harmed by its practices.