NY Attorney General Settles with Three Collection Agencies for $245,000 Total

New York Attorney General Andrew Cuomo announced late Tuesday that his office has reached a deal with three Western New York debt collection agencies whereby the businesses will pay a total of $245,000 in penalties and costs and agree to modify some of their collection techniques.

The three companies — Creditors Interchange Receivable Management, LLC, Capital Management Services, LP and Tri-Financial, LLC — have agreed, in separate settlements, to substantially reform their business practices in order to be in full compliance with the Federal Fair Debt Collection Practices Act (FDCPA) and New York’s Debt Collection Procedures Act, according to Cuomo’s office.

The action comes less than a week after the New York Attorney General’s office announced a sweeping inquiry into the practices of accounts receivable management companies in his state (“NY Attorney General Shuts Down Collection Agencies; Subpoenas 20 Others,” May 28).

Cuomo said in a press release that his office will “continue to investigate the myriad deceptive practices that debt collection companies, debt settlement companies and others employ as a means to exploit consumers who are already down on their luck.” He urged other companies involved in debt collection and debt settlement to follow the example of the three companies named Tuesday.

Cuomo’s office said that it relied on consumer complaints against the companies in the cases.

As a part of the settlement, the companies must amend their practices to make it easier for consumers to file complaints against the company and employees. The companies must provide a direct link on their Web sites to complaint forms and create and maintain a disciplinary history database for their collectors.

According to Cuomo’s statement, consumers alleged that the companies failed to provide debt validation, engaged in third party disclosure, contacted debtors at work, threatened legal action when none was pending and other violations.