Attorney General Cuomo Shuts Down New York Debt Collection Operation That Used Illegal Scare Tactics To Threaten Consumers Across The Country
BUFFALO, NEW YORK (June 23, 2009) - Attorney General Andrew M. Cuomo today announced that his office has shut down a New York collection operation that consisted of at least nine debt collection companies across Western New York, run by Buffalo resident Tobias Boyland. This is the latest action in Attorney General Cuomo's ongoing investigation of unlawful debt collection practices.
According to hundreds of consumer complaints filed with law enforcement agencies across the country, Boyland's employees violated state and federal law by routinely posing as law enforcement officials, threatening to arrest consumers and throw them in jail unless they made arrangements to pay the company immediately. Under the terms of the court order obtained today by Cuomo's office in Buffalo Supreme Court, Boyland's operation will shut down all of its companies in the Buffalo area. Attorney General Cuomo also announced that his Office executed search warrants on four of the operations known locations and on Boyland's residence this morning. When investigators from the Attorney General's Office arrived at the residence, they found a loaded, .380 semi-automatic pistol on Boyland's person. Boyland was taken into custody by the Erie County Sheriff and the Office of the Erie County District Attorney will handle the resulting gun-possession case.
"Plain and simple, this company was run by people who lied, bullied and preyed on vulnerable Americans struggling to resolve their financial situation," said Attorney General Andrew Cuomo. "Pretending to be a police officer, threatening to throw consumers in jail - these practices are as despicable as they are illegal. My Office will continue to relentlessly root out these kinds of tactics and shut down unscrupulous companies that violate the rights of consumers across New York and the entire nation."
According to the lawsuit filed by the Attorney Generals Office, Boyland, a convicted felon, and three other individuals ran numerous debt collecting companies that operated out of at least four locations in Western New York. The other three individuals named in the lawsuit are Kayla Pritchett, Dellian Sharp and Dorian Wills. Both Sharp and Will also have criminal records.
These debt collection agencies operated under several names across the Buffalo area, including: Central Resource Management, Final Claims Asset Locators, Final Control Asset Locators, Interchange Payment Solutions, Next Step Services, Portfolio Asset Assurance, Silverbay Services, and Teleport. Their collectors routinely made scripted telephone calls designed to intimidate consumers into paying their debts. The debt collectors pretended to be law enforcement officers and threatened consumers with arrest and incarceration if they failed to pay. These employees also falsely informed consumers that they were being sued in civil court.
Attorney General Cuomo's investigation revealed that collectors regularly demanded payment for non-existent debts, demanded payments for debts that had already passed the statute of limitations, or substantially inflated the amount owed on an actual debt. Using their false law enforcement identities, collectors coerced and cajoled terrified consumers into agreeing to make payments. Frightened at the prospect of arrest and humiliation, consumers authorized withdrawals from their checking accounts, sent Western Union moneygrams and/or money orders out of fear. Consumers were intentionally given misleading names, addresses and telephone numbers that led them to believe the businesses were located far from the Buffalo area.
Peter Dellinger of the Empire Justice Center said, The Empire Justice Center stands firmly behind Attorney General Cuomo's efforts to stamp out fraudulent and abusive debt collectors across the country. In these times of financial hardship, dishonest debt collection companies are attempting to take advantage of honest, hard-working consumers. We thank Attorney General Andrew Cuomo for his leadership and for putting a stop to these merchants of financial misery.
The federal Fair Debt Collection Practices Act, the New York State debt collection and consumer protection laws prohibit the following conduct: posing as an attorney, threatening lawsuits or other legal action which cannot be taken, saying a consumer committed a crime or will be arrested and talking with third parties except to get location information. The law further requires collection agencies to send a written notice within five days of initial communication with the consumer explaining how he or she can dispute the debt. If properly disputed, the collection agency must stop all collection attempts and send verification.
Today's action is part of a larger investigation by Attorney General Cuomo into unlawful debt collection practices. Earlier this month, Cuomo announced settlements with three Western New York-based debt collection companies to reform their deceptive methods. Attorney General Cuomo also subpoenaed nearly twenty companies and law firms operating as debt collectors throughout the state. His office shut down two collectors for threatening and intimidating consumers into paying debts that they did not owe. In early May, Attorney General Cuomo announced a lawsuit against two debt settlement companies for fraudulent business practices and false advertising by selling misleading debt settlement plans that very rarely deliver the promised benefits to consumers dealing with debt.
Cuomo also launched a website - www.NYDebtHelp.com- that explains consumer rights, allows victims of debt collection and debt settlement companies quick access to the Attorney Generals office to file complaints, and outlines the stages of the Attorney Generals investigation.
The case was handled by Assistant Attorney General Dennis Rosen, Assistant Attorney General Nathan Reilly, Assistant Attorney General James Morrissey and Senior Consumer Fraud Representative Karen Davis, under the supervision of Special Deputy Chief of Staff Mitra Hormozi.
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