Defunct Agency DCI Fined $500k By Connecticut Regulator

The Connecticut Department of Banking is not happy with a debt collector that filed for bankruptcy protection without making the proper notifications, among other alleged violations, and has issued a $500,000 fine, revoked its license, and ordered it to cease and desist from violating state law, although many of the penalties are likely to be moot because the collector has gone out of business.

The penalty was issued earlier this month against Diversified Consultants, which went out of business last April. At its peak, the company employed more than 1,200 individuals in offices across the country. The company was already on the verge of closing when the COVID-19 pandemic hit the United States last year, because it was unable to restructure its debt obligations, according to a published report.

Notifications sent to the company by the Connecticut Department of Banking were returned as undeliverable, according to the order that was issued. The company was accused of failing to notify the department that it had filed for bankruptcy protection and its tangible net worth had decreased below the minimum amount required under state law, that it used an out-of-state bank without a branch in Connecticut to hold money paid by Connecticut debtors, that it charged at least one Connecticut consumer in excess of 15% of the amount collector, failed to provide information required during an examination, and failed to pay the costs of the examination.

DCI had 30 days from the date the order was issued — May 11 — to send its check or money order for $500,000 to the state to cover the amount of the fine. The regulator conducted some form of examination of the company back in February, which formed the basis for the enforcement action.

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