CFPB, N.Y. settlement would ban Buffalo debt collectors from industry

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WASHINGTON — The Consumer Financial Protection Bureau and the New York attorney general have proposed a settlement with owners of a trio of debt collection firms that would ban them from the industry and levy millions of dollars in penalties.

Douglas MacKinnon and Mark Gray were accused in 2016 of operating debt collection companies in Buffalo, N.Y., that inflated consumers’ debts, attempted to collect debt that consumers weren’t obligated to pay, falsely threatened consumers with legal action, and impersonated government officials and law enforcement.

MacKinnon founded and managed the debt collection companies Northern Resolution Group and Enhanced Acquisitions, while both MacKinnon and Gray created and operated a company called Delray Capital. MacKinnon was also found to have organized a network of 60 other debt collection companies.

In the lawsuit filed against them, the CFPB and the New York attorney general alleged that MacKinnon and Gray added $200 of debt to each consumer debt account their companies purchased, and violated several state and federal laws, including the Consumer Financial Protection Act of 2010 and the Fair Debt Collection Practices Act.

“The complaint alleged that since at least 2009, the companies together purchased millions of dollars worth of consumer debt, inflated those consumer debts and relied on illegal tactics to extract as much money as possible from consumers for their debts,” the CFPB said in a statement.

The proposed settlement names both MacKinnon and Gray as well as Northern Resolution Group, Enhanced Acquisitions and Delray Capital. The deal would ban both men from working in debt collection and payment processing again. They would also be barred from accessing consumer information.

MacKinnon, Northern Resolution Group and Enhanced Acquisitions would be required to pay $40 million in damages to consumers, and $10 million each to the CFPB and New York in civil money penalties.

Gray and Delray Capital would be required to pay $4 million in compensation to consumers and $1 million each to the CFPB and New York in civil money penalties. But “full payment of those amounts would be suspended subject to those defendants paying a $1 civil money penalty to the Bureau and $10,000 for consumer redress,” the CFPB said in a press release.

According to the Better Business Bureau, Northern Resolution Group and Enhanced Acquisitions are no longer in business. Phone numbers listed for Delray Capital appeared to be disconnected.

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