Friday, June 22nd, 2012 at
New York Attorney General Eric Schneiderman announced that his office entered into a settlement agreement with John Chebat, who runs several debt collection agencies in what seems to be the debt collection agency capital of the United States – Buffalo, NY. According to a press release issued by Schneiderman’s office, Chebat’s debt collection agencies include Western New York Capital, Inc.; International Asset Group, LLC; Unified Asset Solutions, LLC; Outsourced Legal Prep, LLC; Argos Alliance Group, LLC; and Check Systems Recovery, LLC.
The AG’s investigation uncovered a number of illegal debt collection practices, including contacting consumers’ employers; sending forms to consumers’ employers asking for information like social security numbers; sending letters to consumers on attorney letterhead; falsely threatening to take legal action without intending to do so; and using “Caller ID spoofing,” among others. The settlement mandates that Chabat pay $175,000 and undertake initiatives to ensure that debt collectors abide by the law.
In a separate investigation, the AG’s office tagged Frank Davis, owner of The Lombardo Davis Goldman Firm, LLC. Last year, Davis agreed to a settlement prohibiting him from using a business name that mimicked a law firm’s name. Because he violated the provisions of the settlement, the current agreement shutters the debt collection agency and prohibits Davis from engaging in debt collection activities in New York.
Tuesday, March 29th, 2011 at
On Monday, Minnesota Attorney General Lori Swanson took the first step toward filing suit against Midland Credit Management when she asked a federal court to clarify that a pending class action settlement didn’t preclude the state from pursuing an enforcement action against Midland.
In a press release issued by her office, Attorney General Swanson charged that Midland defrauded Minnesotans and Minnesota courts by robo-signing affidavits, which where then filed in order to obtain judgments against consumers. She specifically went after Midland as a debt buyer, and noted that Midland Funding and Midland Credit Management have bought $54.7 billion in old debt, and have filed 245,000 lawsuits against consumers since 2009. In Minnesota, the company has filed over 15,000 lawsuits since 2008, and has obtained default judgments against consumers in 98 percent or more of the cases. Default judgments are typically awarded when the consumer doesn’t appear in court to defend himself or herself – either because he or she isn’t aware that there’s a pending lawsuit or because the consumer doesn’t understand that there is recourse available. The AG’s press release noted, “Some citizens sued by Midland state that they did not contest the lawsuit because they were not served with it, could not afford an attorney, or did not recognize the name of the debt buyer, since they had never done business with it.”
At issue in the Attorney General’s filing is “robo-signing,” which her office’s press release describes as “the practice of signing off on mass-produced, computer-generated legal documents without reading them or verifying the accuracy of the contents in order to speed up the collection process.” Debt collection agencies must provide courts with proof – in the form of affidavits – that the consumer named in the lawsuit actually owes the money According to the AG’s press release, “The affidavits, however, did not constitute “proof” of the debt because they were robo-signed by people who did not read them and/or who had absolutely no knowledge about the alleged debts to which they attested.”
The AG’s actions are yet another step in Minnesota’s journey to make debt buyers and debt collectors act in good faith and abide by the law. In its investigative reporting series, “Hounded,” the Minneapolis Star-Tribune did an outstanding job highlighting the ways in which debt collectors routinely flout the Fair Debt Collection Practices Act. U.S. Senator Al Franken (D-MN) introduced the End Debt Collector Abuse Act in the last Congress. Minnesota is sending a clear message to debt buyers and debt collection agencies that they need to clean up their act; let’s hope that other states are as dogged in their enforcement efforts as Attorney General Swanson.
Thursday, November 11th, 2010 at
Texas Attorney General Greg Abbott successfully obtained a temporary restraining order against Patrick D. “Dylan” White and his businesses – CASHMAX, Fed Cash, TOPCASH, and Cash Service Center. According to a press release issued by the Attorney General’s office, Oklahoma-based White allegedly sent Texans deceptive collection letters that “were delivered in envelopes that contained the Dallas County Clerk’s forged signature and improperly bore the official seals of both the State of Texas and Dallas County….The notice letters illegally threatened criminal prosecution, referenced a phone ‘case number’ and cited fictitious criminal penalties up to five years in prison and heavy fines.”
The Attorney General is seeking up to $20,000 per violation of the Deceptive Trade Practices Act and the Finance Code.
Wednesday, November 18th, 2009 at
West Virginia Attorney General Darrell McGraw’s Consumer Protection Division has sued 17 internet payday lenders, numerous collection agencies and their principals.
According to the official press release from the WV Attorney General’s office, the lawsuits are part of the Division’s efforts to end the “victimization of West Virginia consumers by Internet payday lenders and their collection agencies.”
The Charleston Gazette published an article covering the lawsuits that goes into greater detail than the press release. The first suit names a series of related ventures and individuals that operated websites that made loans with unlawfully high interest rates under the trade name “FFD Resources.”
Consumers who took out payday loans from the defendants ended up paying as much as ten times the principal in interest.
The companies named in the lawsuit had ignored McGraw’s investigative subpoenas and violated a court order prohibiting collection on their unlawful loans in the state.
The second suit requests that the court order four collection agencies, Capital Collections, LLC, Claims Investigators of America, Crime Monitoring Center and Premier Recovery Group, to comply with the Attorney General’s subpoenas and to stop collecting in West Virginia.
We applaud the WV Attorney General’s commitment to consumer protection. Some of the companies sued are notorious violators of the Fair Debt Collection Practices Act, and are extremely skilled at dodging the law.