NY Attorney General Settles with Three Collection Agencies for $245,000 Total
As an indication that he isn't going away any time soon, NY AG Cuomo announced yesterday settlements with three different debt collection agencies in his state for a total of $245,000.
New York Attorney General Andrew Cuomo announced late Tuesday that his office has reached a deal with three Western New York debt collection agencies whereby the businesses will pay a total of $245,000 in penalties and costs and agree to modify some of their collection techniques.
The three companies -- Creditors Interchange Receivable Management, LLC, Capital Management Services, LP and Tri-Financial, LLC -- have agreed, in separate settlements, to substantially reform their business practices in order to be in full compliance with the Federal Fair Debt Collection Practices Act (FDCPA) and New York’s Debt Collection Procedures Act, according to Cuomo’s office.
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The action comes less than a week after the New York Attorney General’s office announced a sweeping inquiry into the practices of accounts receivable management companies in his state (“NY Attorney General Shuts Down Collection Agencies; Subpoenas 20 Others,” May 28).
Cuomo said in a press release that his office will “continue to investigate the myriad deceptive practices that debt collection companies, debt settlement companies and others employ as a means to exploit consumers who are already down on their luck.” He urged other companies involved in debt collection and debt settlement to follow the example of the three companies named Tuesday.
Cuomo’s office said that it relied on consumer complaints against the companies in the cases.
As a part of the settlement, the companies must amend their practices to make it easier for consumers to file complaints against the company and employees. The companies must provide a direct link on their Web sites to complaint forms and create and maintain a disciplinary history database for their collectors.
According to Cuomo’s statement, consumers alleged that the companies failed to provide debt validation, engaged in third party disclosure, contacted debtors at work, threatened legal action when none was pending and other violations.
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Comments
Comment from Kevin J. Hough / Corpra Care, Inc. on June 3, 2009 at 11:10AM EST
What??..that's it?....I mean judging from the May 28th article one would think that these agencies had no business being in business. So a settlement of 245K between 3 companies?....Then to say: "He urged other companies to follow the example of the three companies named Tuesday"....I would never follow such an poor example of complience....based on alegations set forth in the original article.
Comment from Anonymous on June 3, 2009 at 11:13AM EST
Great what's next a 1-800-GET-EVEN number to report any violation. If you owed it pay it, enough said.
Comment from ProudProfessional on June 3, 2009 at 11:33AM EST
Dear Mr. Cuomo, Make sure the payoff you received goes to all the "victims" of these companies and not your operating budget. By the way, I will not follow the example of any company that tarnishes my industry. One more thing, keep in mind that the same condition that many debtors suffer from that causes them to be in debt also causes them to not participate in the voting process. So with less than 10% of the population engaged in the practice of non-payment, and a small fraction of them who actually vote. You are kowtowing to a phantom constituancy.
Comment from Craig on June 3, 2009 at 11:45AM EST
I think it is admirable that the Attorney General is penalizing agencies who are in violation of the law and using deceptive pratices. I am concerned however, that he is targeting an entire industry as opposed to only the ones in violation of the law. That type of investigating leads to placing a black mark against the industry as a whole.
The agencies that do wrong will be brought to light. I would hope he is not fishing or on a witchhunt.
Comment from DONALD DALY on June 3, 2009 at 12:07PM EST
One can only hope that Cuomo's investigators will stay attached to these companies operating procedures going forward. It doesn't seem like the monetary penalty is much at all, when you factor in three bottomfeeders splitting less than 1/4 million dollars. Did the settlement also include a recorded violation and conviction or were these skallywags let loose without admitting any wrongdoing?
Comment from Anonymous on June 3, 2009 at 12:13PM EST
Check all the collection Agency's in New York that offer flat fees they hire independent agents and don't with hold State and Federal tax's on their agents. They pay for offices, furniture, phones, educate the agents on collections and sales, have quotas', pay for bulk mail permits, etc....and I know one who filed bankruptcy a few years ago and has now come out and have been sold since then has had their agent contracts on more than one occasion to be ruled employees and they are still not witholding state and federal tax's on the employees. They don't even acknowledge it. Yet they still collect money in every state and don't with hold FICA or anything else. What about those possible violations?
Comment from Anonymous on June 3, 2009 at 1:52PM EST
For Anonymous 12:13 ---- Mr. Cuomo obviously thinks that all the voters of his state are deadbeats and tax cheats and wouldnt want to upset them by enforcing any obligations to pay anything.
Comment from Nvassarx on June 3, 2009 at 1:56PM EST
As with a "Rottten Apple" full of worms, you have to get rid of all the worms first, then get a NEW Apple. Close all debt collection companies down, and open new ones?
Comment from the90percent on June 3, 2009 at 2:10PM EST
Send this complaint to the AG. Dear Attorney General, I honor my obligations and in doing so I am forced to cover the cost of those who dont. I estimate that I have to spend and additional $2,000.00 a year to cover the cost associated with the practice of Debt Nonpayment. It has been brought to my attention that there are numerous entities who are actually advising people not to pay their bills in order to negotiate debt forgiveness. This practice is contributing to the skyrocketing charge-off rates and has caused banks stocks to decline in value. As a person who honors my obligation I am part of a group that represents about 90 of the states population. Is there anything you can do for us.
Comment from Illlinois on June 3, 2009 at 2:40PM EST
All valid debts should be paid. That said, deliquencies and charge offs are a factor in determining the risk and associated fees and interest rates charged to borrowers by the original lender. I say this in response to concerns or comments that if debt collectors can't aggressively collect, the sky will fall. The primary issue to my mind is this: if the only evidence a collector has that a debt exists is a name and phone number on a spread sheet, they should consider what they would say to a judge if he asks them if they complied with all applicable consumer protection statutes and consumer fraud laws. .
Comment from DONALD DALY on June 4, 2009 at 10:42AM EST
To 90% dated 6/3/09, how about this: have every creditor file a 1099 and report the additional income for their debtor, then split that amount to anyone who has not recieved a 1099 and issue a credit towards DEBTNONPAYMENT expense to everyone sans 1099. I'll bet it would exceed $2,000 annually.
Comment from Anonymous on June 4, 2009 at 2:34PM EST
I find all of this funny. If everyone paid their bills we wouldn't have a need for collection agency's. The fact remains that everyone is trying to pass the blame on everyone else but the person they see in the mirror. If more people had the back bone to say that they messed up and what do I have to do to get out this wouldn't be an issue. Cuomo is just trying to get re-elected to office. Besides he is on a witch hunt. I really hope he does catch those companies who are breaking the laws and leave the others alone to conduct business.
Comment from no one on June 4, 2009 at 6:09PM EST
well.. it happens i guess. i know you guys like to see an agency pay out... but keep in mind the people that owe money keep these places in business. so.. i guess it evens out pretty well. that money you paid to these places back for your debts went to cover their fines. so you paid it for them. good job guys!! keep up the national debt!!
Comment from Jackie on June 5, 2009 at 4:37PM EST
How very laughable! Three agencies being fined a combined total of $275,000.00 is nothing in our industry. It was a political move and a slap on the hand to the offending agencies. Cuomo, or should I say Coma, achieved nothing but the attention that he desired. He certainly didn't send the message I think he may have intended...illegal collection practices will not be tolerated. He did send the message that when you do violate the FDCPA that you will probably get away with a small fine and can continue to practice the collection tactics that yield higher returns- threats and intimidation. In fact, they will probably not change their policies at all. They will make more money through aggressive tactics even after fines or penalties.
And to No One 6/4 6:09pm- perhaps you should just read these comments and try to learn something before sending out silly national debt comments!
Bravo Coma!
Comment from Jackie on June 5, 2009 at 4:39PM EST
To Rotten Apple comment---- what an idea! Are you serious? Are you old enough to be on the internet? Please stay out of matters that you clearly do not understand.