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Post date: February 9 2010

The New York State Attorney General Andrew M. Cuomo Secures $275k In Restitution For Victims Of A New York Debt Collection Operation That Used Illegal Scare Tactics To Threaten Consumers

BUFFALO, N.Y. (February 9, 2010) - Attorney General Andrew M. Cuomo today announced that his office has obtained court orders barring the three principals of a Western New York debt collection operation from being involved in the debt collection business. Cuomo has also secured $275,000 in restitution for those who were victimized by the company’s scare tactics.

The court orders represent the latest action in Attorney General Cuomo’s ongoing investigation of unlawful debt collection practices. The three individuals who were barred from the debt collection industry, Tobias Boyland, Kayla Pritchett, and Dorian Wills, were principals of at least nine debt collection companies based in Western New York where employees used scare tactics - including impersonating law enforcement - to threaten and intimidate consumers into paying debts that, in many instances, were not even owed. In 2009, Cuomo successfully shut down the operation.

“These individuals used a business model of intimidation, illegal impersonation, and predatory tactics to go after people’s money under the guise of debt collection,” said Attorney General Cuomo. “The leaders of the scheme are now barred from the business of debt collection, and they have to pay back consumers who were terrified and coerced into paying money that many did not even owe.”

According to hundreds of consumer complaints filed with law enforcement agencies across the country, Boyland's employees violated state and federal laws by routinely posing as law enforcement officials and then threatening to arrest and throw consumers in jail unless they made arrangements to pay the company immediately. These employees also falsely informed consumers that they were being sued in civil court.

Cuomo’s investigation revealed that the collectors demanded payment for non-existent debts, attempted to collect payments for debts that had already passed the statute of limitations, or substantially inflated the amount owed on an actual debt. Also, the operation used technology to disguise its addresses and telephone numbers making it hard for consumers to even know with which law enforcement agency, in which state, to register their complaint.

Boyland, a convicted felon, Pritchett, and Wills ran numerous debt collecting companies that operated out of at least four locations in Western New York. 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.

Consumers who believe they were defrauded by these companies and have not yet filed a complaint with the Attorney General’s Office must do so by April 9, 2010 in order to be eligible for restitution.

In September 2009, twelve employees of this debt collection operation were arrested and charged with grand larceny as part of a criminal probe.

The federal Fair Debt Collection Practices Act as well as 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.

The case was handled by Assistant Attorney General-In-Charge of the Buffalo Regional Office Russell Ippolito under the supervision of Deputy Attorney General for Regional Affairs J. David Sampson.