New York Attorney General James and the Consumer Financial Protection Bureau Take Action Against Debt Collection Operation and its Owners and Managers
BUFFALO – New York Attorney General Letitia James, in partnership with the Consumer Financial Protection Bureau (CFPB), today took action against a Buffalo-based debt collection operation accused of using illegal methods to collect debts. From at least 2015 through the present, the lawsuit alleges that defendants used deceptive, harassing, and improper methods to induce consumers to make payments to them in violation of the Fair Debt Collection Practices Act (FDCPA), the Consumer Financial Protection Act of 2010 (CFPA), and New York state law.
“We will not sit idly by as debt collectors extort payment from consumers by using illegal and deceitful tactics,” said Attorney General James. “Collecting on money that consumers do not owe — and doing so using false threats of arrest and other unscrupulous means — is inexcusable and unlawful. My office is committed to defending the rights of New Yorkers, and I thank the CFPB for their partnership in this case.”
“This lawsuit should send a clear message to debt collectors who violate the law that we will take action to stop such practices and protect consumers,” said CFPB Director Kathleen L. Kraninger. “The Bureau is committed to holding these companies and individuals accountable for threatening, harassing, and deceiving consumers. I thank Attorney General James and her staff for working with us on this matter.”
JPL Recovery Solutions, LLC; Regency One Capital LLC; ROC Asset Solutions LLC, which does business as API Recovery Solutions; Check Security Associates LLC, which does business as Warner Location Services and Orchard Payment Processing Systems; and Keystone Recovery Group operated as one common operation enterprise that shared headquarters, exchanged financial transactions, and bought out each others’ acquired debts. The defendants are alleged to have deceived consumer debtors by making them believe that their debt was being bought by another company, when in fact their debt was being passed around different entities owned by the same people.
The lawsuit also names the principals and the managers of these companies individually. The individual defendants are Christopher Di Re and Scott Croce, who have held ownership interests in some or all of the defendant companies, and Brian Koziel and Marc Gracie, who are members of Keystone Recovery Group, and have acted as managers of some or all of the defendant companies.
The complaint was filed in the U.S. District Court for the Western District of New York. In the lawsuit, the OAG and CFPB allege that the defendants violated several provisions of the FDCPA by threatening consumers with arrest or legal action the firms had no intention of taking, or could not legally take; threatening to contact consumers’ employers, family, and friends to disclose the debt; claiming consumers owed more debt than they did in order to convince them to pay the amount owed; harassing consumers by using intimidating, belittling, or menacing language and repeatedly and excessively phoning consumers; and failing to provide legally required notices informing consumers of their right to know how much they owed and of their ability to dispute the amount or existence of the purported debt.
This case follows suit in a long line of actions taken by Attorney General James to seek justice on behalf of consumers in New York state. Just last year, Attorney General James announced $66 million in restitution and penalties against debt collection kingpin, Douglas McKinnon, who engaged debtors using similar deceptive and illegal tactics.
The complaint seeks consumer redress, disgorgement of ill-gotten gains, civil money penalties, and appropriate injunctive relief against the defendants.
This matter was handled by Assistant Attorney General Christopher L. Boyd, under the supervision of Assistant Attorney General-in-Charge of the Buffalo Regional Office Michael Russo, with assistance from Senior Consumer Fraud Representative Karen Davis, as well as Investigators Jennifer Terranova and Erica Law, under the supervision of Supervising Investigator Ken Peters. The Division of Regional Affairs is led by Deputy Attorney General for Regional Affairs Jill Faber and overseen by First Deputy Attorney General Jennifer Levy.