The Connecticut Department of Banking has assessed a $45,000 fine against a collection operation for a number of alleged violations, including failing to maintain the minimum tangible net worth requirements, failing to account for and remit to its clients all money collected, and collecting amounts in excess of the amount placed with the agency, among other violations.
A copy of the consent order with HOVG, doing business as Bay Area Credit Service, can be accessed by clicking here.
The company was also accused of failing to avoid the commingling of funds and failing to maintain records to clearly identify amounts and dates of payments that were received.
The regulator issued its order back in 2021, at which point the collector requested a hearing, which is currently subject to a continuance. But now, both sides agreed to settle the matter and move forward.
Some of the alleged violations — such as operating an unlicensed consumer collection operation, and that consumers were contacted at inconvenient times — were not pursued by the regulator after the company provided evidence demonstrating it did not engage in those activities. The company also said it has cured the tangible net worth requirement issue and will maintain adequate financials going forward.
Along with paying the fine, the company agreed to cease and desist from a number of the allegations that were made, while also agreeing to establish policies and procedures “sufficient in scope and depth to address the risk present in HOVG’s collections operations and shall clearly delineate management’s responsibility over each requirement.” The company must also provide the regulator with copies of its written policies and procedures and conduct semi-annual audits to “test all functions” of its operations.
