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Post date: July 8 2015

A.G. Schneiderman Announces $550k Settlement Agreement To Shutter Debt Collection Company

Med-Rev Recoveries, Inc. Repeatedly Violated Debt Collection and Consumer Protection Laws

Schneiderman: Debt Collectors That Employ Abusive Tactics Will Be Held Accountable

SYRACUSE – Attorney General Eric T. Schneiderman today announced that a court order has been obtained against Med-Rev Recoveries, a consumer debt collection agency formerly located in Liverpool, NY, permanently barring it from operating as a debt collector and requiring payment of $550,000 for consumer restitution, civil penalties and costs. Med-Rev’s sole owner, John St. Denis, and its former President, Jamie Fortino signed a stipulation agreeing to the terms.

 “Living with medical debt is difficult enough as it is, without the added stress of being bullied by debt collectors,” Attorney General Schneiderman said. “This settlement sends the message that debt collectors that employ abusive tactics will be held accountable.”

The Attorney General’s Office and the Better Business Bureau received dozens of complaints from consumers alleging verbal harassment by Med-Rev collectors and their refusal to provide consumers with account balance or verification of the debts it was attempting to collect. In addition, consumers and medical providers complained that Med-Rev was not timely remitting consumers’ payments to the creditors. Some consumers learned their payments had not been credited to their past-due accounts when they sought medical, dental and/or veterinary care and were denied treatment due to unpaid debt.

The conduct alleged in the consumer complaints indicated that Med-Rev Recoveries was not abiding by the terms of a settlement agreement that it had signed in 2009, which was accepted by the Attorney General’s Office at that time to resolve allegations of deceptive acts and practices and repeated illegality in its debt collection business. Pursuant to the 2009 Assurance of Discontinuance (“AOD”), Med-Rev agreed to comply with all state and federal laws, including but not limited to the Fair Debt Collection Practices Act (“FDCPA”), the NYS Debt Collection Practices Act (“DCPA”) and New York State’s General Business Law which prohibits deceptive acts and practices in the conduct of business. In addition, Med-Rev agreed that it would remit consumer checks to the creditors at least monthly, but no later than the fifteenth of each month.

After a year-long investigation, Attorney General Eric Schneiderman filed a lawsuit on February 11, 2015, alleging that Med-Rev repeatedly violated state and federal debt collection and New York State’s consumer protection law, and continued to engage in conduct that violated the 2009 AOD. The investigation revealed that Med-Rev repeatedly

• ignored consumers’ requests for debt verification and continued collection efforts;
• misrepresented the amount of the debt owed by adding fees, costs and expenses that were not due and legally chargeable against the consumer;
• engaged in verbal conduct that harassed consumers, including screaming and demeaning consumers on the phone;
• failed to provide consumers, upon request, with account balances, proof of payment statements and/or receipts; and
• failed to timely remit consumers’ payments to the creditors, often waiting until the consumer or business complained.

Prompted by the Attorney General’s lawsuit, Jamie Fortino immediately resigned as President and Med-Rev ceased collecting consumer debt.

The consent order, which was signed by Onondaga County Supreme Court Justice James P. Murphy, was entered with the Court Clerk on July 6, 2015, and permanently bars Med-Rev Recoveries, Inc., Jamie Fortino and John St. Denis from engaging in the debt collection business. In addition, the court order prohibits Med-Rev from maintaining any open trade lines on consumer credit reports. Med-Rev has already contacted the three major credit reporting bureaus and requested that all of its open trade lines be deleted from consumers’ credit histories. The consent order does not extend to CNY Property Management, Inc., a New York-based corporation owned by John St. Denis that leases real property to consumers or businesses and manages such properties, but is not primarily engaged in debt collection.

The Consent Order also requires Med-Rev to issue refund checks to consumers who were charged a fee for paying with a credit card and to consumers who paid a collection fee to Med-Rev in connection with Monroe Ambulance accounts. Under state and federal debt collection laws, a debt collector may only charge additional fees if such fees are authorized by the consumer’s original contract with the creditor.

Pursuant to the Consent Order, Med-Rev will pay a total of $550,000 for consumer restitution, civil penalties and costs.

Consumers who believe that Med-Rev did not properly credit their payments to their accounts should contact their original medical provider (the creditor) directly, to verify any outstanding account balances. Consumers whose account balances appear to be inaccurate and/or consumers who paid fees to Med-Rev that were not authorized by their original contract with the creditor, may be eligible for restitution. Consumers are encouraged to promptly file a written complaint with the Attorney General’s Office and to include all available supporting documentation regarding payments made or fees charged. To be eligible for restitution, consumer complaints must be received no later than January 2, 2016. Complaints will be addressed as they are received. The Restitution Fund shall be available for six months, provided that the funds are not depleted prior to that date.

The case was handled by Assistant Attorney General Judith Malkin of the Syracuse Regional Office, with the assistance of Senior Investigator Andrea Buttenschon, Consumer Frauds Representative Jean Ryan, Syracuse Regional Office Volunteer Dennis Swanson, Assistant Attorney General Ed Thompson of the Syracuse Regional Office, and Martin J. Mack, Executive Deputy Attorney General for Regional Affairs.