The Connecticut Department of Banking has fined a debt collector for collecting interest in violation of state law on one account during a 15-year period, in the latest in a series of enforcement actions taken against companies in the accounts receivable management industry.
Resurgent Capital Services has agreed to pay a fine of $2,500 without admitting or denying liability in the enforcement action. It has also agreed to eliminate and refund any illegal interest that is collected in the future.
Section 36a-809-12 of the Banking Law of Connecticut prohibits collectors from collecting any interest, fee, or charge that is not expressly authorized by the agreement creating the debt or permitted by law. The regulator requested collection activity conducted by the collector from 2002 through 2017, and the collector itself conducted an “extensive audit” of its Connecticut accounts and found one instance where interest accrued in violation of the statute, according to the settlement agreement.
Violations of Section 36a-809-12 and Section 36a-808 of the Connecticut General Statute carry penalties of up to $100,000, according to the settlement agreement. Acknowledging that Resurgent cooperated fully with the investigation and its interest in “obviating the need for formal administrative proceedings” regarding the allegations, the settlement between the parties was reached.
The Department has twice fined collection agencies $10,000 and charged them for unpaid licensing fees after they were alleged to operate in the state without a proper licenses, and fined a defunct collector $500,000 for not notifying the state that it had filed for bankruptcy protection.