Federal, state agencies team up to charge NY firms, staffers, with collecting debts illegally through threats, harassment

Debt collection operations in New York that allegedly used illegal methods – including bullying, harassment and threats – to collect debts now face charges from both the federal consumer financial protection agency and the state attorney general, the federal agency said in a release Tuesday.

The Consumer Financial Protection Bureau (CFPB) and New York Attorney General Letitia James said they had filed suit against five different companies based near Buffalo, N.Y., as well as two of the companies’ owners and two managers, for the alleged illegal debt collection operation.

According to the CFPB and the NYAG, the firms and individuals allegedly “have participated in a debt-collection operation that has used deceptive, harassing, and improper methods to induce consumers to make payments to them in violation of the Fair Debt Collection Practices Act (FDCPA) and the Consumer Financial Protection Act (CFPA).” The actions, the agencies charged, began at least in 2015 and continued through the present.

Named as defendants in the complaint are:

  • Companies: JPL Recovery Solutions, LLC; Regency One Capital LLC; ROC Asset Solutions LLC (which the agencies said does business as API Recovery Solutions); Check Security Associates LLC, (under the name of Warner Location Services and Orchard Payment Processing Systems, the agencies said); and Keystone Recovery Group.
  • Individuals: Christopher Di Re and Scott Croce, who have held ownership interests in some or all of the defendant companies; and Brian Koziel and Marc Gracie, members of Keystone Recovery Group, and who have acted as managers of some or all of the defendant companies, according to the bureau and NYAG.

The agencies said they are seeking consumer redress, disgorgement of ill-gotten gains, civil money penalties, and appropriate injunctive relief against the defendants.

Under the complaint, the agencies charge that the defendants violated several provisions of the FDCPA by threatening consumers with arrest or legal action the firms had no intention of taking or could not legally take; threatening to contact consumers’ employers to disclose the debt; claiming consumers owed more debt than they did in order to convince them to pay the amount they owed; impermissibly contacting consumers’ friends, family, and workplace to disclose the existence of a consumer’s debt or to shame or humiliate them; harassing consumers by using intimidating, belittling, or menacing language and repeatedly and excessively phoning consumers; and failing to provide legally required notices informing consumers of their right to know how much they owed and of their ability to dispute the amount or existence of the purported debt.

The complaint also alleges, the agencies said, that the defendants engaged in deceptive acts or practices in violation of the CFPA by misrepresenting that they would have the consumer arrested, that they would file lawsuits they did not intend to file, that they would garnish the wages of the consumer, and that the consumer owed more than they actually did.

The complaint also alleges that the violations of the FDCPA constituted violations of the CFPA and that the individual defendants substantially assisted the firms in their deceptive conduct, the agencies said.

The NYAG additionally alleges violations of New York law based on the same conduct.

Consumer Financial Protection Bureau and New York Attorney General take action against debt-collection operation and its owners and managers