Report Delves Into Buffalo’s Origins as Epicenter of Illegal Collection Operations

A published media report aims to answer a question that many in the accounts receivable management industry have long asked — Why is Buffalo the epicenter for illegal debt collection activity? According to the report, cheap office space, no licensing requirements, and huge profits reaped by legitimate debt collectors dating back to the 1970s are why so many illegal operations are running in Erie and Niagara counties. Authorities have fined, seized, or obtained more than $120 million in judgments and prosecuted more than three dozen cases against illegal debt collectors in the past decade alone in that area, according to the report.

The report details many of the higher-profile cases that have come out of the Buffalo area in recent years, and many of those cases have included ties to organized crime. Seeing how legitimate debt collectors were making large sums of money with little capital investment encouraged more unsavory individuals to enter the space, according to a retired assistant attorney general who “spent decades suing corrupt debt collectors,” according to the report. Buffalo, according to the report, used to also be a hub for illegal telemarketing operations and hundreds of arrests and convictions were obtained in the 1990s as federal lawmakers went after the “telesharks.”

Many familiar names are included in the report, including Douglas MacKinnon, who was most recently sued by the Consumer Financial Protection Bureau and the New York Attorney General for selling his house to his wife and daughter for $1 to avoid it being seized, Joseph Ciffa, who was part of a group that allegedly bilked more than $1 million from individuals and led to jail time for a number of participants, Travell Thomas, who was permanently barred from the industry by the Federal Trade Commission, and Joseph Bella.

Buffalo ranked fifth in the nation among metropolitan areas with the highest number of bill and account collectors per 1,000 jobs, according to the report, training San Angelo, Texas, Sebastian-Vero Beach, Fla., St. Joseph, Miss., and Jacksonville, Fla.

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