On July 25, the U.S. Consumer Financial Protection Bureau (CFPB) and the New York Attorney General (AG) announced that they had fined three New York-based debt collection companies and their owners over $60 million for illegally inflating consumer debts and barred them from further debt collection activity.
That settlement with the companies, Enhanced Acquisitions, LLC, Northern Resolution Group, LLC and Delray Capital, LLC, was announced with a joint consent order. That order alleges that over at least the past decade, the firms "purchased millions of dollars' worth of consumer debt, inflated those consumer debts, and relied on illegal tactics to extract as much money as possible from consumers for their debts." Their alleged activities, which included impersonating law enforcement officials, violated state and federal laws.
The bulk of the settlement involved the first two companies and their owner -- $40 million to consumers and $20 million to the CFPB and the AG's office. The other company and its owner agreed to pay just $4 million to consumers and $2 million in penalties. However, because the defendants in the suit reportedly lack the money to pay those amounts, the CFPB said that full payment of the settlement would be suspended if the defendants paid $10,000 for consumer redress and a civil penalty of just $1 to the federal consumer watchdog.
The settlement brings an end to a lawsuit filed by the AG's office and the CFPD three years ago. In the settlement, the two owners neither admitted nor denied the allegations.
Taking illegal advantage of people who are already in a difficult financial situation is a particularly egregious offense. It can be all too easy to mislead people who are overwhelmed by debt into believing they owe more than they do. If you're dealing with calls, notices and other demands from debt collectors, it's wise to consult an attorney to determine what steps you can take to get your financial life back on track and get out from under the burden of dealing with collectors.