The Attorney General of Pennsylvania announced yesterday that it had entered into a voluntary agreement with a financial institution which will require the institution to stop engaging in what the AG described as “aggressive” debt collection practices.
The institution — Northwest Bank — was accused of filing collection lawsuits against individuals with unpaid car loans in counties that were “some distance away” from the counties in which the individual resided, and sending post-judgment letters that threatened further legal action that the bank never acted upon. As part of the Assurance of Voluntary Compliance, the bank did not admit to any violation, but did agree to strike all existing judgments that were obtained between 2013 and the effective date of the agreement, issue a credit to the deficiency balance on any amount that was paid as a result of a judgment and refund any difference if the credit reduces the amount owed to $0, and pay a $15,000 fine, among other provisions.
The bank allegedly filed collection lawsuits in Warren County, Pennsylvania, in which the bank is based, instead of filing them in the district in which the defendant resides now, resided when the motor vehicle was purchased, or where the vehicle was purchased. After obtaining judgments, the bank would allegedly send letters to individuals, telling them that if they failed to enter into a repayment plan, their account could be referred for further legal action, which could include a sheriff’s sale of the individual’s property.
“Northwest Bank has a right to pursue legal action when borrowers don’t pay back their loans,” said Josh Shapiro, the Attorney General of Pennsylvania, in a statement
