3/23/2016New Mexico: Another Settlement Costs Redflex $3 Million
Redflex and Creditwatch to pay $3.5 million for using robocalls to collect on unpaid red light camera tickets in Albuquerque, New Mexico.
The legal bills for Redflex Traffic Systems continue to mount. Last week, the Australian firm asked a federal judge to approve a $3.5 million settlement over strongarm tactics used to collect on ignored red light camera citations in Albuquerque, New Mexico.
In 2011, Albuquerque residents voted to kick Redflex out, but city officials did not want to let the issue drop. They granted Redflex permission to generate up to $20 million in "new" revenue by collecting on 89,000 unpaid tickets, many of which were by then a decade old. Redflex outsourced the collection task to Creditwatch, which used automated phone calls to pester motorists until they paid up. The lead plaintiff in the lawsuit, David Willet, received nineteen calls from Creditwatch on his cell phone in violation of the Telephone Consumer Protection Act, a federal statute that prohibits the use of prerecorded calls to mobile phones without prior consent.
Facing potential penalties of up to $75 million under this law, Redflex and Creditwatch decided to accept the settlement which caps liability at $3.5 million. Redflex is liable for paying up to $2,970,000 of this amount with Creditwatch paying the $530,000 remainder. Under the deal, 42,000 vehicle owners who received a red light camera ticket collection call from Creditwatch on their cell phone between August 21, 2010 and January 15, 2016 are eligible for a settlement payment of "up to $200." After fees of $1,155,000 are paid to the class action attorney firms Keogh Law and Treinen Law Office, however, the likely maximum payment is $55. Those who wish to opt out of the class action settlement have 75 days to do so.
The settlement does not end the legal woes at Redflex, which is currently under investigation at home by the Australian Federal Police. Redflex also faces ongoing Federal Bureau of Investigation scrutiny in the United States. Next week, John Raphael will be sentenced for his role in the Redflex bribery scandal in Ohio, while Karen Finley, former chief of US operations, will be sentenced on June 21. Redflex faces a potential $300 million judgment in Chicago, Illinois that its insurance company does not want to pay.