New York Attorney General Eric T. Schneiderman announced a settlement with Joseph Bella, the operator of several debt collection companies in the Buffalo area, for “illegally collecting on payday loans, violating the privacy of consumers by soliciting their personal information through employers, and sending letters that purported to be from an attorney in order to collect.” Bella will pay $165,000 in restitution and penalties and be ordered to substantially change his business practices.
According to the New York AG’s complaint, the defendants:
- told one consumer in Washington State that they would have the “Washington County Police” issue a warrant for her arrest, and another serving in the military that they would bring an action against him under the Uniform Code of Military Justice;
- said the only way to avoid arrest, imprisonment, lawsuits, wage garnishments, and seized assets would be to make an immediate payment over the phone;
- continued to accuse consumers of check fraud and other crimes even after they produced evidence showing they didn’t owe the debt in question;
- contacted friends, family members, and co-workers of consumers whom they claimed owed a debt, and in some cases, not only revealed the supposed debt but also said the consumers had committed check fraud, and would be arrested or imprisoned if the debt was not paid;
- added an illegal $8 “processing fee” when consumers made payments on supposed debts over the phone;
- failed to provide consumers with debt collection notices and disclosures that are required under state and federal law, making it difficult for consumers to determine whether they owed the debt, and how they could dispute its validity; and
- continued trying to collect a debt from a consumer who had discharged the debt in bankruptcy.
Here’s a link to the New York Attorney’s General pres release: New York Payday Loan Collection Company Settles with State AG.