The federal Consumer Financial Protection Bureau (CFPB) and the New York state attorney general filed a proposed judgment in federal court to settle its case against a group of debt collection firms that have a “history of deception and harassment,” according to a Monday (May 23) press release.
The judgment, if approved, would require the defendants to exit the debt collection industry and pay a combined $4 million in companies, according to the release.
The companies, according to the complaint, bought debt consumers had amassed through payday loans and credit cards and then collected $93 million from 293,000 consumers from 2015 through 2020.
Based at a single location in New York State, the companies “purchased defaulted consumer debt for pennies on the dollar” and used social media to threaten consumers.
“It is illegal for debt collectors to orchestrate smear campaigns using social media to extort consumers into paying up,” CFPB Director Rohit Chopra said in a statement. “Our action with the New York Attorney General bans the ringleaders of this operation from the industry to halt further misconduct.”
Attorney General Letitia James added, “Predatory debt collectors make their profit by targeting hardworking consumers and then illegally saddle them deeper into debt. These debt collectors used harassing calls and false threats to coerce consumer to pay, not only is that illegal, it’s also downright shameful.”
Illegal actions the companies engaged in, according to the release, included falsely claiming debtors could be arrested and imprisoned; lying about legal action the debt holders could take; inflating amounts owed so they could offer “settlements” of lesser amounts; and creating “smear campaigns” to tell friends and employers about individuals’ debts.
“The network did this even after collectors were told by victims to stop contact,” the press release said.
The defendant companies are JPL Recovery Solutions; Regency One Capital; ROC Asset Solutions, which does business as API Recovery Solutions and Northern Information Services; Check Security Associates, which does business as Warner Location Services, Pinnacle Location Services, and Orchard Payment Processing Systems; Keystone Recovery Group; and Blue Street Asset Partners.
The individual named defendants are Christopher Di Re, Scott Croce, Susan Croce, Brian Koziel and Marc Gracie. They were the owners and operators of the companies involved.
The case began in 2020.
