December 7, 2022

CFPB and New York State Attorney General Seeks to Settle Case with New York Debt Collection Firm

The Consumer Financial Protection Bureau (CFPB), in conjunction with the New York Attorney General, has filed a proposed stipulated judgment in federal court to settle its case against an upstate debt collection company in New York.

© Shutterstock

The judgment would order all program participants to exit the debt collection market and shut down their businesses due to their history of deception and harassment. Their debt collection companies would also be required to pay a total of $4 million in penalties.

The complaint alleges that the companies created “smear campaigns” using social media and other methods. They allegedly pressured people to pay by contacting and disclosing the debts to immediate and distant family members, grandparents, in-laws, ex-spouses, employers, co-workers, landlords, Facebook friends and other known associates, according to the CFPB. In addition, collectors allegedly repeatedly called people several times a day for periods of a month or more, using insulting and disparaging language and intimidating behavior.

“It is illegal for debt collectors to orchestrate smear campaigns using social media to extort consumers to pay,” CFPB Director Chopra said. “Our action with the New York Attorney General bars the ringleaders of this industry operation to end further misconduct.”

The corporate defendants are JPL Recovery Solutions; Regency One Capital; ROC Asset Solutions, which operates as API Recovery Solutions and Northern Information Services; Check Security Associates, which does business as Warner Location Services, Pinnacle Location Services and Orchard Payment Processing Systems; Keystone Recovery Group; and Blue Street Asset Partners. The individual defendants are owners Christopher Di Re, Scott Croce, Susan Croce, Brian Koziel and Marc Gracie, who acted as managers of some or all of the companies, according to the CFPB.

“This debt collection operation used illegal and deceptive tactics to prey on consumers, and now they are paying the price for the harm they caused,” said New York State Attorney General Letitia James. “Predatory debt collectors make their profit by targeting hard-working consumers and then illegally pushing them further into debt. These debt collectors have used harassing calls and fake threats to coerce consumers into paying, not only is it illegal, it’s downright shameful. Today’s action should send a strong message to debt collectors nationwide that we will not hesitate to use the full force of the law to hold them accountable if they harm consumers.

The various companies are interdependent collection companies based in Getzville, New York. These companies purchased defaulted consumer debt for pennies on the dollar from high-interest personal loans, payday loans, credit cards and other sources. The network then attempted to collect debts from approximately 293,000 consumers, generating gross revenue of approximately $93 million between 2015 and 2020.

The CFPB and the New York Attorney General allege the network used deceptive and harassing methods in violation of federal laws. Specifically, the complaint alleges that they falsely threatened people with arrest and imprisonment if they failed to pay and falsely threatened legal action, including wage garnishment and seizure of property. In addition, the defendants allegedly lied about the amount of the debts.