Debt collection firm, former CEO hit with penalties for harming consumers

A Kansas-based debt collection company and its former chief executive and part owner have been assessed penalties of $3 million each for unlawful debt collection acts and practices, harming consumer, the federal consumer financial protection agency said today.

However, in the consent order released by the Bureau of Consumer Financial Protection Bureau (BCFP, formerly known as the CFPB), the full payment of those penalties are suspended subject to the company paying a $500,000 civil money penalty and the former CEO and part owner paying a $300,000 civil money penalty, according to the consent order.

In release, the BCFP said that it had reached a settlement with National Credit Adjusters, LLC (NCA), of Hutchinson, Kansas, and its former CEO and part-owner, Bradley Hochstein. According to the release, the bureau found that the company and Hochstein used a network of debt collection companies to collect consumer debt on NCA’s behalf.

“Some of those companies engaged in frequent unlawful debt collection acts and practices that harmed consumers, including by representing that consumers owed more than they were legally required to pay, or threatening consumers and their family members with lawsuits, visits from process servers, and arrest, when neither NCA nor the collection companies intended or had the legal authority to take those actions,” the bureau said in the release.

It added that NCA and Hochstein continued placing debt with those companies for collection with knowledge or reckless disregard of the companies’ illegal consumer debt collection practices. “NCA and Hochstein also sold millions in consumer debt to one of those companies with knowledge or reckless disregard of the company’s illegal consumer debt collection practices,” the bureau said.

Bureau Settles With National Credit Adjusters, LLC and Bradley Hochstein