Agency Fined $20k for Violating Earlier Consent Order

The Minnesota Department of Commerce has assessed $20,000 in fines to a collection agency that was accused of continuing to violate an earlier consent order in which the agency allegedly violated the Fair Debt Collection Practices Act and state law in Minnesota.

A copy of the consent order with Direct Recovery Services can be accessed by clicking here.

Back in 2020, the Department of Commerce entered into a consent order with the agency, in which the agency agreed to cease and desist violating any rules, laws, or orders after it was found to have allegedly violated state law by commingling funds and allowing agents to work from unlicensed branch locations. The state assessed a fine, a portion of which was stayed.

Despite the agreement to cease and desist, the agency was found to be violating state law in Minnesota as well as the Fair Debt Collection Practices Act by collecting on payday loans from unlicensed lenders, failing to provide meaningful disclosures on telephone calls with consumers, and having several of its agents not registered in Minnesota as debt collectors.

As of April 2022, the agency is under new ownership, and any alleged violations of the 2020 consent order occurred under the previous ownership. Nonetheless, the state order the agency to pay the remaining balance on the stayed portion of the fine from the 2020 consent order — $19,000, and to pay a civil penalty of $25,000, of which $24,000 was stayed. If the agency does not commit any further violations of any law, rule, or order through December 31, 2025, the stayed portion of the fine will be vacated.

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