North Carolina issues enforcement order against debt collection operation


On October 10, the North Carolina Attorney General announced a consent judgment with the president and CEO of two debt collection companies (collectively, the “Defendants”). According to the AG, in 2019, the AG sued the defendants for allegedly engaging in illegal debt collection practices. The AG alleged that from 2012 to 2018, the CEO used his debt collection companies to purchase unpaid consumer debt from a national company that sold furniture, appliances and electronics on a hire-purchase basis. As of 2018, he reportedly collected or attempted to collect these unpaid debts from North Carolina consumers, even though he did not have the proper registration or licenses to operate in the state. The AG further noted that the defendants allegedly sent customers mock court notices that did not come from the court and claimed that they had committed a criminal offense by not returning the rented property. When consumers contacted the companies, they received debt collection threats. The defendants also filed criminal complaints in multiple counties that resulted in actual criminal summonses against clients. Among other things, the defendants are ordered to cancel the debts of 20,000 people, reimburse 650 consumers and pay fines. Defendants are also permanently barred from collecting debts in North Carolina and are required to report compliance to the AG’s office.

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