When a debt collector calls, stay calm and find out how much you actually owe. It sounds obvious. But aggressive debt collectors turn their jobs into performance art and lie to scare people into shelling out money whether they owe it or not. That’s why you can hang up on them, and contact the company or institution they mentioned directly. Find out what they have in their records and get the real story.
A lawsuit by the Consumer Financial Protection Bureau and the New York State Attorney General highlights the bad practices of a network of companies operating a collection scheme all across the country that brings in tens of millions of dollars a year. The lawsuit alleges that they continue to “harass, threaten and deceive millions of consumers across the nation into paying inflated debts or amounts they may not owe.”
Northern Resolution Group, Enhanced Acquisitions, and Delray Capitals, all based in Buffalo, N.Y., purchased millions of dollars of consumer debt. Under the oversight of Douglas MacKinnon and Mark Gray, the lawsuit alleges that since at least 2009, the companies ran ” a massive collections scheme that routinely inflated consumer debts and relied on illegal tactics to extract as much money as possible from consumers.”
CFPB Director Richard Cordray said, “Living with debt is difficult enough as it is, without the added stress of being harassed and threatened by debt collectors.”
According to the lawsuit the debt collectors:
- Inflated the amount people owe. In some cases the companies inflated the debt by 600 percent. They also added $200 to every account they attempted to collect.
- Falsely threatened legal action and arrests. Company representatives sometimes identified themselves as government officials. In one instance in Los Angeles, a debt collector claimed he represented the “Los Angeles County Courts” and told a consumer she didn’t have time to get a lawyer and faced arrest the next day if she didn’t pay up immediately. The same collection agent continued to harass her and her relatives demanding payment.
In other instances, collectors called and demanded immediate payment and harassed people at work and called their relatives to tell them about lawsuits filed against them. In fact, the companies did not file lawsuits and apparently didn’t intend to do so.
The CFPB and the New York Attorney General asked a federal judge in the Western District of New York to stop the company from doing business and to order them to pay penalties and restitution to the victims.
As the case winds it way through the legal process, we’ll have a better idea of when people will get money back and how much.
In the meantime, if you think these companies took money from you illegally, get in touch with the New York State Attorney General: 1-800-771-7755, or the Consumer Financial Protection Bureau or the consumer advocate in your state.