Court Order Shuts Down Med-Rev Recoveries For Failing To Abide By Terms Of Prior Agreement

New York Attorney General Eric T. Schneiderman announced today that a court order has been obtained against Med-Rev Recoveries, (Med-Rev) a consumer debt collection agency formerly located in Liverpool, NY, permanently barring it from operating as a debt collector and requiring payment of $550,000 for consumer restitution, civil penalties and costs.

Med-Rev’s sole owner, John St. Denis, and its former President, Jamie Fortino signed a stipulation agreeing to the terms.

The investigation of the company came after a significant number of consumer complaints about the company were received by the Attorney General’s office and the Better Business Bureau. Those complaints suggested that Med-Rev was not abiding by the terms of a settlement agreement that it had signed in 2009, which was accepted by the Attorney General’s Office at that time to resolve allegations of deceptive acts and practices and repeated illegality in its debt collection business.

Pursuant to the 2009 Assurance of Discontinuance (“AOD”), Med-Rev agreed to comply with all state and federal laws, including but not limited to the Fair Debt Collection Practices Act (“FDCPA”), the NYS Debt Collection Practices Act (“DCPA”) and New York State’s General Business Law which prohibits deceptive acts and practices in the conduct of business. In addition, Med-Rev agreed that it would remit consumer checks to the creditors at least monthly, but no later than the fifteenth of each month.

After a year-long investigation, Attorney General Eric Schneiderman filed a lawsuit against the company on February 11, 2015. The lawsuit alleged that Med-Rev repeatedly:

1. ignored consumers’ requests for debt verification and continued collection efforts;
2. misrepresented the amount of the debt owed by adding fees, costs and expenses that were not due and legally chargeable against the consumer;
3. engaged in verbal conduct that harassed consumers, including screaming and demeaning consumers on the phone;
4. failed to provide consumers, upon request, with account balances, proof of payment statements and/or receipts; and
5. failed to timely remit consumers’ payments to the creditors, often waiting until the consumer or business complained.

Salient terms from the consent order are as follows:

1. Med-Rev, Jamie Fortino and John St. Denis are permanently barred from engaging in the debt collection business.
2. Med-Rev is prohibited from maintaining any open trade lines on consumer credit reports. Med-Rev has already contacted the three major credit reporting bureaus and requested that all of its open trade lines be deleted from consumers’ credit histories.
3. Med-Rev is required to issue refund checks to consumers who were charged a fee for paying with a credit card and to consumers who paid a collection fee to Med-Rev in connection with Monroe Ambulance accounts.
4. Med-Rev will pay a total of $550,000 for consumer restitution, civil penalties and costs.

insideARM Perspective

This is another black eye for the ARM industry and perpetuates a negative view of all collection agencies operating in northern New York. It is an all-too-familiar story. What is particularly annoying is that this was Strike 2 for this company. As noted above, this company had previously been investigated by the State and had entered into an AOD.

The challenge for our industry is that these stories reinforce the belief of regulators and consumer attorneys that all collection agencies operate in this manner.  insideARM believes that perception is not reality.

However, the question remains for the industry. How do we change the perception?