The Connecticut Department of Banking has ordered a collection agency to refund all charges, fees, and amounts received from consumers in the state for the past five years while also announcing a hearing has been scheduled to revoke and refuse to renew a license for the company to collect in the state and possibly impose a fine of $100,000 after accusing the agency of committing a number of violations, including not remitting payments to creditors in a timely manner and not complying with applicable collection laws.
A copy of the order against HOVG, which does business as Bay Area Credit Service, can be accessed by clicking here.
This is not the first time that the company has run afoul of state law in Connecticut. It previously was subjected to a consent order back in 2015, and under the terms of that order, it agreed to stop acting as a collection agency from an unlicensed location, adding interest to balances when the consumers were not liable for it, ad failing to remit funds to creditors within 60 days from the last day of the month in which the funds were collected.
A follow-up examination that was conducted in 2019 identified additional the new series of allegations, which constituted a basis to suspend, revoke, or refuse to renew the company’s license to collect in Connecticut.
The follow-up examination found that the company was receiving payments from Connecticut consumers at an unlicensed location in Georgia, which was not a licensed branch office. The company was also found to have “failed to maintain accounting records in accordance with generally accepted accounting principles, failed to identify amounts and dates of payments collected or received from consumer debtors and remittances made to creditors, failed to identify all trust accounts utilized by Respondent and failed to preserve all records related to its collection activities.”
The agency is entitled to a hearing, if it so chooses. The hearing will be held on January 29 if the agency requests it. If the agency does not request a hearing or fails to appear at it, the order issued by the Department becomes permanent and the agency will not be licensed to collect in Connecticut.