The Federal Trade Commission and the Attorney General of New York have charged a group of companies and individuals with violating the Fair Debt Collection Practices Act as well as New York state law in collecting on counterfeit debts that individuals did not owe.
To make matters worse for the defendants, they allegedly used illegal tactics to attempt to collect on the debts, including failing to provide required notices about the debt and consumers’ rights to dispute the debt, and threatening to contact, or contacting, family members or other third parties, according to the FTC, which filed a complaint in the District Court for the Western District of New York.
A copy of the complaint can be accessed by clicking here. The defendants in the case are Hylan Asset Management, LLC and its owner, Andrew Shaevel, and Worldwide Processing Group, LLC and its owner, Frank A. Ungaro, Jr.
Hylan and Shaevel are accused of selling fake debt portfolios and placing fake portfolios with agencies for collections. The fake portfolios were purchased by entities controlled by Joel Tucker, who has also been sued by the FTC for selling fake loan portfolios. Hylan continued to sell the portfolios even after receiving alerts that there were a high number of complaints from consumers that they did not owe the purported debts.
When confronted by consumers who said they did not owe the debts, the defendants would “often respond to these inquiries by reciting consumers’ personal information—including addresses, social security numbers, employment history, and banking information—in an attempt to make the debt appear legitimate or represent that they can collect on the debt regardless of its validity,” according to the complaint.
At least one of the defendants’ lawyers said the lawsuit as a “government ploy,” according to a published report.
Dennis Vacco, a lawyer for Hylan and Shaevel, dismissed the lawsuit as a government ploy, a document filled with only one side of the story. He also suspects the FTC and attorney general left key evidence out of the suit.
He referred specifically to an April 2016 email from an FTC lawyer to Hylan and said the message refers to the same debt portfolios at the center of the suit. He said the FTC lawyer noted that debt portfolios can contain both legitimate and illegitimate debts and to, “proceed with extreme caution.”
“This is not an FTC asking them to cease and desist,” Vacco said Wednesday. “The FTC said proceed with caution and that’s exactly what Hylan did.”
