West Virginia Attorney General Darrell McGraw today announced agreements with five out-of-state ARM firms requiring them to pay a total $772,286 in refunds and cancelled debts to settle charges that they engaged in unlawful debt collection within the state.
The investigations that led to the settlements were prompted by complaints that the companies were, in most cases, not licensed to collect in the state and that all were collecting on Internet payday loans, which are illegal in West Virginia.
“Internet payday loans are harmful to consumers and have never been legal in West Virginia,” McGraw said. “My office will continue to intervene whenever any agency, licensed or otherwise, is collecting unlawful debts here.”
The five companies, the most recent targets of McGraw’s Consumer Protection Division actions against unlawful debt collection, are: Frontier Financial Group, Henderson, NV; United Debt Holding, Castle Rock, CO; Skutr Financial, Las Vegas, NV; USCB Corp., Archibald, PA; and Mauconduit & Luna, Hapeville, GA.
The companies appear to be unrelated at the ownership level, but most were doing business with each other.
McGraw’s investigation revealed that Frontier Financial was both unlicensed and attempting to collect Money & More’s payday debts. Further investigation disclosed that Frontier was primarily collecting debts for two unlicensed debt buyers also named in the settlements, United Debt Holding and Skutr Financial. Those companies were attempting to collect on Internet payday loans and charged-off credit card debts.
McGraw’s office later opened investigations of USCB and Mauconduit & Luna. Although licensed to collect debts in West Virginia, USCB was collecting charged-off Internet payday loans that it had purchased from various lenders. Mauconduit & Luna was not licensed to collect debt in the state.
“State laws and regulations governing collection agencies are intended to protect both consumers and legitimate creditors from fraud and abuse,” Attorney General McGraw said. “The Tax Department has made it clear that debt buyers who buy charged-off debts for collection must comply with collection agency laws.”