A debt collector in Buffalo, N.Y., has agreed to pay $165,000 in restitution and penalties for violating consumers privacy laws in a settlement with New York Attorney General Eric Schneiderman.
Joseph Bella, who operates several debt collection companies in the Buffalo region, is accused of illegally contacting borrowers employers in search of information about their Social Security numbers, hourly wages and hiring dates. Debt collectors are prohibited from contacting borrowers employers for this kind of personal information under federal law.
Bella committed numerous other violations of the Fair Debt Collection Practices Act, according to a Thursday press release from the New York Attorney General. His companies allegedly implied that they planned to garnish workers wages when they had no authority to do so and sent letters to consumers under the name of an attorney without the attorneys involvement. They also allegedly collected on payday loans, which are illegal in New York.
Across the state, weve worked aggressively to ensure that debt collectors who exploit desperate consumers and break the law pay a price for their behavior, Schneiderman said in the release. In this case, were pleased that consumers who paid on payday loans will receive full restitution and that Bella will receive heavy penalties."
Bella will be ordered to substantially change his business practices as a result of the settlement, according to the release.
Federal and state regulators have led a charge to reform debt collection practices this year. The Consumer Financial Protection Bureau announced this month that it was considering new regulations that would update rules on how collectors communicate with borrowers, among other restrictions.
The crackdown in New York has largely been led by Benjamin Lawsky, superintendent of the states Department of Financial Services. Schneiderman joined the fray in August, filing a lawsuit against three online payday lenders that accused the companies of violating usury laws by making loans with annual interest rates between 80% and 335%.