The Consumer Financial Protection Bureau (CFPB), in collaboration with the New York Attorney General, has filed a proposed stipulated sentence in federal court to resolve its case against an upstate New York debt collection company.
The ruling would order all participants in the scheme to exit the debt collection market and close their businesses due to their history of deception and harassment. His debt collection companies would also have to pay a total of $4 million in penalties.
The complaint alleges that the companies created “smear campaigns” using social media and other methods. They allegedly pressured people to pay by contacting and disclosing the debts to their immediate and extended family members, grandparents, in-laws, ex-spouses, employers, co-workers, landlords, Facebook friends and other known associates, according to the CFPB. In addition, the collectors allegedly repeatedly called people several times a day for periods lasting a month or more, using insulting and demeaning language and intimidating behavior.
“It is illegal for debt collectors to organize smear campaigns using social media to extort consumers into paying,” CFPB Director Chopra said. “Our action with the New York Attorney General prohibits the ringleaders of this industry operation from stopping further misconduct.”
The companies sued are JPL Recovery Solutions; Regency One Capital; ROC Asset Solutions, doing business as API Recovery Solutions and Northern Information Services; Check Security Associates, doing business as Warner Location Services, Pinnacle Location Services and Orchard Payment Processing Systems; Keystone Recovery Group; and Blue Street Asset Partners. The individual defendants are owners Christopher Di Re, Scott Croce, Susan Croce, Brian Koziel and Marc Gracie, who acted as managers of some or all of the companies, according to the CFPB.
“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 New York State Attorney General Letitia 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 consumers to pay, not only is it illegal, it’s also 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.”
The various companies are interrelated collection businesses based in Getzville, NY. These companies bought delinquent consumer debt for pennies on the dollar from high-interest personal loans, payday loans, credit cards and other sources. The network then tried to collect the debts of some 293,000 consumers, generating gross revenues of about $93 million between 2015 and 2020.
The CFPB and the New York Attorney General allege that the network used deceptive and harassing methods in violation of federal law. Specifically, the complaint alleges that they falsely threatened individuals with arrest and imprisonment if they did not make payments and falsely threatened legal action, including wage garnishment and property seizure. In addition, the defendants allegedly lied about the amounts of the debts.