Scammers Banned from Industry, to Pay $4M in Fines After Being Sued by CFPB, NY AG

A proposed stipulated judgment has been filed in federal court that would bring an end to an enforcement action brought by the Consumer Financial Protection Bureau and the Attorney General of New York against a series of individuals operating more than a half-dozen different companies all out of the same office that were accused of engaging in “smear” campaigns to “extort” individuals into making payments on debts. The judgment, if approved by the judge, would ban the individuals from ever participating in the debt collection industry again, while also requiring the defendants to $2 million each to the CFPB and NY AG’s office.

A copy of the stipulated final judgment in the case of Bureau of Consumer Financial Protection and the State of New York v. JPL Recovery Solutions, Check Security Associates (dba Warner Location Services, Pinnacle Location Services, and Orchard Payment Processing Systems), ROC Asset Solutions (dba API Recovery Solutions and Northern Information Services), Regency One Capital, Keystone Recovery Group, Bluestreet Asset Partners, Christopher Di Re, Scott Croce, Brian Koziel, Marc Gracie, and Susan Croce can be accessed by clicking here.

If the defendants do not make timely payments on their civil fines — $500,000 within three days of the Effective Date and the remaining $1.5 million within 180 days — the size of the fines increases to $2.5 million to the CFPB and $2.5 million the New York AG’s office.

The CFPB and New York AG launched their lawsuit in September 2020, accusing the defendants of collecting $93 million in revenue from nearly 300,000 consumers between 2015 and 2020. To collect on the debts, the defendants threatened individuals with arrest, imprisonment, lawsuits, wage garnishments, and seizures, while also lying about how much was owed, and failing to provide legally mandated disclosures under the Fair Debt Collection Practices Act. The defendants also used social media to pressure people into paying their debts by contacting their friends and family members and disclosing the existence of debts, and repeatedly called individuals multiple times a day. Collectors working for the defendants were instructed to let the individual hang up on each call, so it could be marked as disconnected in the company’s logs and giving the collector a pretense to call back as soon as the next day.

“It is illegal for debt collectors to orchestrate smear campaigns using social media to extort consumers into paying up,” said CFPB Director Rohit Chopra, in a statement. “Our action with the New York Attorney General bans the ringleaders of this operation from the industry to halt further misconduct.”

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