The Connecticut Department of Banking has issued a temporary order to cease and desist against a Texas-based collection agency for operating in the state without the required license. This action comes after a consumer complaint and subsequent investigation revealed multiple violations of Connecticut state laws and the Fair Debt Collection Practices Act.
Order and Penalties
The order mandates that Nelson Cruz & Associates immediately halt all collection activities within Connecticut until it secureas a proper consumer collection agency license. The company faces potential civil penalties of up to $100,000 per violation for their unauthorized operations.
A copy of the temporary order and notice of intent to impose civil penalties can be accessed by clicking here.
Background of Violations
The investigation began following a complaint received on February 8, 2023, from a Connecticut resident who reported aggressive debt collection attempts by the agency starting in August 2022. The complainant detailed how the agency made multiple phone calls demanding immediate payment and threatened to report the debt to credit bureaus if bank account information was not provided. Despite requests for debt verification, the agency failed to provide the necessary documentation, violating FDCPA regulations.
The Department of Banking’s investigation revealed that the company’s unlicensed collection activities stemmed from a software malfunction that incorrectly classified certain accounts, including the complainant’s, as eligible for collection. The agency’s response to the Department’s inquiries was deemed insufficient and failed to rectify the situation, leading to the issuance of the cease and desist order.
Compliance Requirements
The agency has the right to request a hearing, which must be submitted within fourteen days of receiving the order.
