The Connecticut Department of Banking has assessed a $30,000 fine and barred a collection operation from the state for three years after it was alleged to have collected in the state without the proper license.
A copy of the consent order against Mercantile CT, which was doing business as Mercantile Adjustment Bureau, and Mercantile Adjustment Bureau (MAB), can be accessed by clicking here.
MAB had been licensed to collect in Connecticut as far back as 2002 and its license expired in 2019. It represented to the department that as of November 2018, MAB would cease consumer collection activities in Connecticut and that any future collection activity would be conducted by Mercantile CT.
After an investigation, Mercantile CT was alleged to be engaging unlicensed collection activity, failing to deposit funds collected or received from Connecticut consumers in a trust account, failing to maintain the tangible net worth requirements under state law, failing to notify the banking Commissioner that it had fallen under the net worth minimum, making a false or misleading statement in a document filed with the Commissioner, and conducting business in a way which rendered the Commissioner “unable to determine that the financial responsibility, character and integrity” of Mercantile CT were such to “warrant belief” that the business would be operated soundly and efficiently, according to the consent order.
After being informed of the results of the investigation, Mercantile CT requested a hearing, which is still pending, but voluntarily agreed to the consent order “for the purpose of obviating the need for further administrative proceedings.” MAB and Mercantile CT also represented to the Commissioner that any payment made by a Connecticut consumer was credited to the consumer’s account in full and that they did charge any collection fees to the consumer.
Along with paying the $30,000 fine, MAB shall cease and desist from acting as a consumer collection agency in Connecticut without a license. Mercantile CT will surrender its Connecticut consumer collection agency license and will be barred from acting as a collection agency in the state for three years. If either Mercantile CT or MAB apply for a license in the future, they will, according to the consent order, “include evidence … that such consumer collection agency has implemented an effective system of supervision and control to achieve compliance with all applicable consumer collection laws and regulations, and has adequately remedied all prior violations alleged by the Commissioner to prevent recurrence in the future.”
