Collection Operations Banned From Industry, to Pay $1.2M in Fines

The Attorney General of New York announced yesterday a settlement with three debt collection companies owned by Andrew Fanelli that will permanently ban them from any future debt collection activities while also paying $1.2 million in fines and restitution to individuals impacted by the collectors’ tactics.

A copy of the Assurance of Discontinuance between the Attorney General and Andrew Fanelli, Northwood Asset Management Group, Pinnacle Asset Recovery Group, and Koalaty Pay can be accessed by clicking here.

The companies were accused of engaging in illegal collection tactics, such as threatening legal action that the companies did not plan to take, falsely threatening to garnish the wages of consumers, falsely threatening to have consumers’ driver’s licenses suspended, implying that the collector was an attorney or law enforcement official, and threatening criminal action if debts were not paid.

Along with operating the collection call centers, Fanelli also managed a “substantial” debt brokering business. Fanelli was tied to Kenneth Thomas and Douglas MacKinnon, who have also run afoul of the New York Attorney General and other law enforcement agencies for their roles in debt collection scams.

Fanelli and his companies were accused of violating the Fair Debt Collection Practices Act, the Consumer Financial Protection Act, and other state laws in New York.

Under the terms of the settlement, Fanelli and his companies are banned from collecting consumer debt, banned from brokering the sale of consumer debt portfolios, banned from consumer lending, banned from payment processing, banned from debt settlement, and banned from credit services.

“New Yorkers can trust that I will always stand up for our most vulnerable, especially when their wallets are at risk,” said Attorney General Letitia James, in a statement. “While illegal debt collectors have used Buffalo as their hub of operations for illicit conduct for years, we are continuing to fight back and shut down these companies one by one. The unlawful behavior perpetrated by Andrew Fanelli and his companies defrauded consumers, but this agreement will end their illegal behavior, once and for all. I encourage anyone who may have fallen victim to these deceptive debt collectors to immediately file a claim with our office to recover what was unlawfully taken from them.”

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