Advocates, including The Legal Aid Society, have won a unanimous decision upending over a decade of bad case law that enabled unscrupulous debt collectors to extract massive amounts of wealth from low-income neighborhoods.

The decision will rein in widespread debt collection schemes that fraudulently garnish wages and freeze bank accounts in violation of New Yorkers’ constitutional due process rights.

Sharae Banks, a Harlem resident and single mother of three, brought the appeal after a debt buyer fraudulently garnished $16,000 of her wages over three years for tuition allegedly owed to a trade school that the state ordered shut down in 2006. A lower court relied on case law to rule that Ms. Banks had waited too long to challenge the garnishment, despite the fact that she had never received notice of the lawsuit. This week’s ruling corrects that flawed precedent.

New Economy Project, The Legal Aid Society, and Quinn Emanuel Urquhart & Sullivan, LLP represented Ms. Banks in the appeal, Esgro Capital Management, LLC v. Sharae Banks. The decision will empower New Yorkers to challenge “sewer service”—a rampant practice in which debt collectors falsely claim to courts that they served people with notice of a lawsuit so that they can obtain a default judgment.

“This decision sends a clear message that debt collectors will no longer get away with the abusive practice known as ‘sewer service,’ and that our clients and all New Yorkers’ due process rights will be protected,” said Tashi Lhewa, Director of the Economic Equities Project at The Legal Aid Society. “We will continue to fight on behalf of our clients and remain vigilant against abusive consumer debt practices that effectively punish people for being poor or lacking legal representation.”