A number of debt collection companies, alleged to have been operating as one common enterprise, along with the principals and managers of the companies have been sued by the Attorney General of New York and the Consumer Financial Protection Bureau, for allegedly violating the Fair Debt Collection Practices Act, the Consumer Financial Protection Act, and state law in New York.
A copy of the complaint in the case of the CFPB and Letitia James, the Attorney General of New York v. JPL Recovery Solutions, LLC; Check Security Associates, LLC (dba Warner Location Services and Orchard Payment Processing Systems); ROC Asset Solutions LLC (dba API Recovery Solutions); Regency One Capital LLC; Keystone Recovery Group, LLC; Christopher L. Di Re; Scott A. Croce; Brian J. Koziel; and Marc D. Gracie can be accessed by clicking here.
“This lawsuit should send a clear message to debt collectors who violate the law that we will take action to stop such practices and protect consumers,” said CFPB Director Kathleen L. Kraninger, in a statement. “The Bureau is committed to holding these companies and individuals accountable for threatening, harassing, and deceiving consumers. I thank Attorney General James and her staff for working with us on this matter.”
The defendants, who were sued in the District Court for the Western District of New York, are accused of collecting as much as $10 million in revenue in 2015 and $23 million in revenue in 2018. To collect those funds, the defendants allegedly made false threats that individuals would be sued, have their wages garnished, or be arrested and put in prison if the debts were not paid. The defendants also allegedly attempted to collect more than was owed on payday loans that they had purchased by telling individuals they were liable for for the full amount of principal and interest payments for the entire loan period, instead of telling them they were liable for the unpaid principal and any other contractually authorized amounts.
The defendants also allegedly contacted friends, family, work colleagues, or supervisors of consumers of the individuals with unpaid debts in order to “pressure” them into paying, according to the complaint. The objective was to contact third parties and tell them the individual was in some kind of distress in order to “stir the pot” and pressure the individual into contacting the defendants.
The defendants encouraged their collectors to have the individual hang up on each call so they could maintain a pretense that the call was disconnected, allowing the collector to call back the following day and exert more pressure.
Individuals were also not provided with statutorily required validation notices under the FDCPA.
