New York Attorney General Letitia James and the Consumer Financial Protection Bureau (CFPB), they closed on Monday a predatory debt collection operation that used deceptive and abusive tactics to illegally collect millions of dollars from hundreds of thousands of consumers.
The debt collection operation, made up of several companies, including JPL Recovery Solutionsfalsely threatened consumers with harsh consequences if they did not pay, inflated the actual amount of debts owed, and contacted consumers’ friends, family, and employers to harass consumers.
As a result of the action by Attorney General James and the CFPB, this debt collection operation, its owners and managers must pay $4 million and are permanently banned from the debt collection industry.
“This debt collection operation used illegal and deceptive tactics to take advantage of consumers, and now they are paying the price for the damage they caused,” said Attorney General James. “Predatory debt collectors make their profits by targeting hard-working consumers and then illegally put them deeper into debt. These debt collectors used harassing calls and false threats to force the consumer to pay, actions that are illegal and downright embarrassing. Today’s action should send a strong message to debt collectors across the country that we will not hesitate to use the full force of the law to hold them accountable if they harm consumers.”
This debt collection operation was made up of interrelated businesses headquartered in Getzville, New York. Together, they bought delinquent consumer debt for pennies on the dollar. The debt came from high-interest personal loans, payday loans, credit cards and other sources. The operation then tried to collect debts from as many as 293,000 consumers, generating gross revenue of about $93 million between 2015 and 2020.
The companies involved in this operation included JPL Recovery Solutions, LLC; Regency One Capital LLC; ROC Asset Solutions LLC, doing business as API Recovery Solutions; Check Security Associates LLC, doing business as Warner Location Services and Orchard Payment Processing Systems; and Keystone Recovery Group. These companies were owned by Christopher Di Re, Scott Croce, and Susan Croce, and headed by Brian Koziel and Marc Gracie.
The attorney general and the CFPB alleged that the operation used deceptive and harassing methods and violated various state and federal consumer protection laws. Specifically, the complaint alleged that owners, managers, and companies used the following illegal tactics to collect debts:
• False threats of arrest: On occasion, collectors working for these companies falsely threatened consumers with arrest and jail time if they did not make payments. In fact, consumers are not subject to arrest or imprisonment for nonpayment of debts.
• Lying about legal actions: The companies falsely threatened consumers with legal action, including wage garnishment and asset seizure.
• They inflated the debts and misrepresented the amounts owed: The defendants deceptively inflated the amount owed to convince people that paying the amount they actually owed represents a substantial discount. To further coerce consumers, collectors said it was an offer that would only be available for a short period of time.
• They created “smear campaigns”: Collectors contacted consumers’ immediate family members, grandparents, extended family, in-laws, ex-spouses, employers, co-workers, landlords, Facebook friends, and other known associates, to pressure people to pay. The collectors did this even after consumers told the collectors to stop contact. Victims described these tactics as “emotional terrorism.”
• Harassment with repeated phone calls: The collectors repeatedly called people several times a day for periods lasting a month or more. In fact, bill collectors were instructed to allow the consumer to hang up every call so they could keep the pretense in their call logs that they were disconnected and then call back as soon as the next day. The collectors also used insulting and demeaning language and behaved in an intimidating manner when calling.
• You did not provide legally required disclosures: Collectors failed to provide consumers with notices required by law detailing their rights. When people asked for them, some collectors refused to give them to them.
As a result of the settlement, this operation must pay $2 million to New York and $2 million to the CFPB. If they do not pay the $4 million judgment in a timely manner, they will be required to pay another $1 million.
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