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New York AG and CFPB finally take action against alleged Buffalo collection scheme

New York AG, CFPB join forces to fight illegal national debt collection scheme : Frost Illustrated A new federal lawsuit alleges that since at least 2009, two major players in the debt collection industry have illegally operated, harassed, threatened and deceived millions of consumers across the country—often for debts that were either inflated or not even owed. The scheme based in Buffalo, New York, also netted tens of millions of dollars in revenue each year.

I cannot tell you how great this is for consumers in this country. Since 2010, I have gotten hundreds of calls from consumers seeking help against debt collectors.

Since that time I have learned to focus on where the debt collector is located to determine if I will help out a particular client.

If I hear that the collector is located in Buffalo, New York I almost always stop immediately.

Buffalo you see, at least in my industry, is synonymous with scam. I don’t know why but it seems as if 80% of all crooked collectors locate themselves in Buffalo.

Is it the proximity to a national border that draws them in? City policies that incentivize debt collectors ‘investing’ in Buffalo? Who knows.

All I know is that these types of schemes have gone on far too long and hopefully these two governmental groups can put these people permanently out of business.

According to the lawsuit, MacKinnon and Gray operate a network of at least 60 fly-by-night collection shops to collect on large debt portfolios purchased by three interrelated firms: Northern Resolution Group, Enhanced Acquisitions and Delray Capital, all based in Buffalo, New York. MacKinnon and Gray created, operated and oversaw the illegal operation.

Don’t think for one minute that this is only good for consumers.

All debt collectors and creditors should applaud these efforts because taking out bad actors, assuming such accusations are proven, levels the playing field.

Leveling the playing field means fair competition among all.

What sections of the FDCPA are MacKinnon and Gray accused of violating?

• Falsely threatening legal action;

• Impersonating law enforcement officials, government agencies and court officers; and

• Inflating consumer debts and misrepresentations of amounts consumers owed.

While we don’t know for sure whether this particular company or individuals have done anything wrong hopefully the collection industry takes notice.

It is far easier to collect a debt if you can threaten someone with arrest for not paying. Lot’s of people will suddenly find money when their freedom is at stake.

This is one reason why the IRS scam purportedly run out of India was so profitable, making something like $150,000.00 per day.

Will this stop all the scams running out of Buffalo? Only time will tell but it is a warning to those that are actually scamming consumers.