Attorney General James and CFPB end predatory debt collection operation

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AG James and CFPB prohibit the operation of debt collection from industry,
Demand that they pay $4 million in penalties and damages

Debt collectors used illegal and deceptive tactics
This hurt thousands of consumers across the country

NEW YORK – New York Attorney General Letitia James and the Consumer Financial Protection Bureau (CFPB) today shut down a predatory debt collection operation that used deceptive and abusive tactics to illegally collect millions of dollars to hundreds of thousands of consumers. The debt collection operation – made up of several companies, including JPL Recovery Solutions – falsely threatened consumers with dire consequences if they did not pay, inflated the actual amount of debts owed and contacted friends, members of family and employers of consumers to harass consumers. As a result of today’s action by Attorney General James and the CFPB, this debt collection operation, its owners and managers must pay $4 million and are permanently banned from the debt collection industry . This resolves an earlier lawsuit brought against the operation by Attorney General James and the CFPB.

“This debt collection operation used illegal and deceptive tactics to prey on consumers, and now they are paying the price for the harm they caused,” said Attorney General James. “Predatory debt collectors make their profit by targeting hard-working consumers and then illegally pushing them further into debt. These debt collectors used harassing calls and false threats to compel the consumer to pay, actions that were both illegal and downright shameful. Today’s action should send a strong message to debt collectors nationwide that we will not hesitate to use the full force of the law to hold them accountable if they harm consumers.

“It is illegal for debt collectors to orchestrate smear campaigns using social media to extort consumers to pay,” said Director of CFPB Rohit Chopra. “Our action with the New York Attorney General bars the ringleaders of this industry operation to end further misconduct.”

This debt collection operation was made up of interdependent businesses based in Getzville, New York. Together they bought up delinquent consumer debt for pennies on the dollar. The debt came from high-interest personal loans, payday loans, credit cards and other sources. The operation then attempted to collect debts from approximately 293,000 consumers, generating gross revenues of approximately $93 million between 2015 and 2020.

Companies involved in this transaction included JPL Recovery Solutions, LLC; Regency One Capital LLC; ROC Asset Solutions LLC, doing business as API Recovery Solutions; Check Security Associates LLC, which does business as Warner Location Services and Orchard Payment Processing Systems; and the Keystone Recovery Group. These companies were owned by Christopher Di Re, Scott Croce and Susan Croce, and were run by Brian Koziel and Marc Gracie.

Attorney General James and the CFPB alleged that the operation used deceptive and harassing methods, violating several state and federal consumer protection laws. Specifically, the complaint alleged that the owners, managers and businesses used the following illegal tactics to collect the debt:

  • Arrest and imprisonment falsely claimed: On occasion, debt collectors working for these companies falsely threatened consumers with arrest and imprisonment if they did not pay. In fact, consumers are not likely to be arrested or imprisoned for non-payment of debts.
  • Lied about a lawsuit: The companies were wrongfully threatening consumers with legal action, including wage garnishment and seizure of property.
  • Inflated debts and distorted amounts owed: Defendants falsely inflated the amount owed to convince people that paying the amount they actually owe represents a substantial discount. To further constrain consumers, collectors said this was an offer that would only be available for a short time.
  • Creation of “defamation campaigns”: Collectors reached out to consumers’ immediate family members, grandparents, extended family members, in-laws, ex-spouses, employers, co-workers, landlords, Facebook friends and other known associates, to pressure people into paying. Collectors did this even after consumers told collectors to stop contact. Victims called these tactics “emotional terrorism.”
  • People harassed with repeated phone calls: Collectors repeatedly called people several times a day over periods of a month or more. The collectors were indeed instructed to let the consumer hang up on each call so that he could pretend in his call logs that he had been disconnected, and then call back the next day. Collectors also used insulting and disparaging language and engaged in bullying behavior on the call.
  • Has not provided the information required by law: Collectors have failed to provide consumers with legally required notices detailing their rights. When people asked for them, some collectors refused to provide them.

As a result of today’s settlement, this operation must pay $2 million to New York and $2 million to the CFPB. If they don’t pay the $4 million judgment in a timely manner, they will have to pay an additional $1 million.

This case follows a long series of actions by Attorney General James to seek justice on behalf of consumers in New York State. Last year, Attorney General James banned debt collector Andrew Fanelli and his company Northwood Asset Management Group from the consumer debt collection industry for allegedly collecting debts using similar deceptive and illegal tactics. . In 2019, Attorney General James announced a $60 million judgment against debt collection leader Douglas MacKinnon, who hired debtors using similar deceptive and illegal tactics. Attorney General James and the CFPB took vigorous action to enforce that judgment, including filing a motion for civil contempt against MacKinnon.

This case was handled by the Assistant Deputy Attorney General in Charge of the Buffalo Regional Office, Christopher L. Boyd, under the supervision of the Assistant Attorney General in Charge Michael Russo, with assistance from the Senior Representative for Fraud in the consumption Karen Davis, as well as investigators Jennifer Terranova, Erica Law and Shawn McCormick, under the supervision of supervising investigator Ken Peters. The Regional Affairs Division is headed by Deputy Attorney General for Regional Affairs Jill Faber and overseen by Senior Deputy Attorney General Jennifer Levy.


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