NY Attorney General Slaps Another Collection Agency

A Nebraska debt collector has been barred from collecting in New York state in a settlement announced Monday by state Attorney General Andrew Cuomo, the latest in a series of actions against collection agencies by Cuomo’s office.

Cuomo’s office reported that collection agency Neon Claims Advantage, LLC of Nebraska will no longer be allowed to collect in New York because the firm had failed to include in letters language required by the Fair Debt Collection Practices Act (FDCPA), and made “misleading claims and failed to validate the amount of the debt in letters to consumers."

The investigation that led to the settlement was prompted by Neon’s work on behalf of Quality First Auto Glass, an auto repair business in Amherst, N.Y. In a separate, but related, settlement, Quality First agreed to suspend collection activities against 424 consumers that it said owed a total of $233,000.

The $233,000 was the price difference between the amount Quality First billed to insurance companies for automobile glass replacement, and the amount the firm received in return from the insurers (known as a deficiency amount). Quality First contracted with Neon Claims Advantage to attempt to collect the money from consumers. Quality never received the $233,000. Quality First went out of business in 2006 and then started collection proceedings with Neon on the consumers. 

Consumer complaints about the collection proceedings prompted the office to begin its investigation.

Cuomo’s office has been aggressively pursuing collection agencies in New York. In recent months, the AG fined Aurora Gold Associates $35,000 ("NY Attorney General Fines Buffalo Collection Agency," May 1), and fined NAFS $85,000 for over-zealous debt collection practices ("Buffalo Collector Gets Hit with $85,000 Fine by State AG," Dec. 19, 2007).