Attorney General Cuomo Halts Deceptive And Abusive Practices By Western New York Debt Collector
BUFFALO, N.Y. (April 30, 2008) – Attorney General Andrew M. Cuomo announced today that a Western New York debt collection company that engaged in deceptive and abusive practices will reform their business and pay $35,000 in penalties and costs under a settlement agreement with his office.
Aurora, Gold & Associates, LLC of Williamsville began operations in April 2007 and engaged in illegal practices including collectors pretending to be attorneys, threatening consumers with fictitious lawsuits and discussing confidential debtor information with unrelated parties.
“It is not acceptable for debt collection companies to harass consumers to the point where they overstep legal boundaries,” said Attorney General Cuomo. “Collecting money from debtors is one thing, but by using dishonest and illegal tactics, this company misled consumers and violated the law. This agreement requires that it reform its business practices to be in line with New York state and Federal laws.”
Tactics used by Aurora Gold included repeatedly calling debtors’ family and friends in attempts to find addresses and other information, despite requests to stop calling. The Attorney General also found that Aurora Gold’s Web site contained statements that created the false impression that it was a law firm and could sue debtors.
In one instance, a collector – pretending to be an attorney – left a message on a consumer’s answering machine in which he told the consumer that there was a “pending civil suit” against her. Aurora Gold was forced to fire this employee after the incident was brought to the company's attention by the Attorney General.
In addition to paying $35,000 in penalties and costs, the agreement requires Aurora Gold to immediately institute a number of reforms to correct its current practices and to ensure that it will deal with debtors and third parties fairly and according to the law.
Aurora Gold must also file a report with the Attorney General by July 30 proving that it is operating in full compliance with the Attorney General’s agreement.
Under federal law, debt collection agencies are allowed to contact individuals by various means, but they are restricted from contacting debtors at inconvenient times or places (e.g. before 8 a.m. or after 9 p.m.). The Federal Fair Debt Collection Law prohibits agencies from contacting individuals at their place of employment if the agency knows that the debtor’s employer disapproves. Debt collection agencies are barred from engaging in abusive and unfair tactics and misleading representations, including:
- Repeatedly or continuously calling with the intent to annoy or harass
- Placing telephone calls without meaningful disclosures of their identity
- Falsely implying that collectors are attorneys or that there is the involvement of an attorney in collecting a debt
- Falsely claiming that they are government representatives
- Falsely claiming that an individual has committed a crime or threaten arrest or imprisonment
- Falsely implying that the debt collector is employed by a credit bureau
- Collecting an amount greater than what is owed
New York State’s Debt Collection Procedures Law offers additional protections such as prohibiting:
- Communicating the nature of a debt with an individual’s employer prior to obtaining a judgment against the debtor
- Threatening to collect a fee over and above the owed debt
- Contacting an individual or family member with such frequency or at such unusual hours as can be reasonably considered abuse or harassment.
More information about debt collection and relevant state and federal laws can be found online at Debt Managment Consumer Tip Publication.
Attorney General Cuomo urges consumers experiencing credit-related financial problems or debt collection phone calls to consider seeking assistance by contacting a not-for-profit credit counseling agency licensed by the New York State Banking Department (www.banking.state.ny.us/).
The Aurora Gold case was handled by Assistant Attorney General Dennis Rosen with the assistance of Senior Consumer Fraud Representative Karen Davis and Senior Investigator Peter Eiss, under the supervision of Russell Ippolito, Assistant Attorney General-In-Charge of the Buffalo Regional Office.