West Virginia Attorney General Patrick Morrisey’s office has reached a $19.7 million settlement with Cavalry Portfolio Services in a six-year-old case where the debt collection firm faced accusations of pursuing debts in West Virginia without a license to do so.
The settlement means Cavalry, also known as Cavalry Investments, must stop collecting on $19.7 million in debt from roughly 2,800 consumers. The firm also must pay $350,000 to West Virginia.
The company has denied all of the allegations but agreed to delete all account information from the affected customers' credit records.
Former West Virginia Attorney General Darrell McGraw, in a 2010 complaint filed in Kanawha (W.Va.) Circuit Court,
"This settlement provides significant relief directly to the affected consumers,” Morrisey said. "Companies operating in our state must respect our laws."
Former Attorney General McGraw, when his office filed the case, told Collections & Credit Risk debt buyers were flooding the West Virginia courts with suits against "financially unsophisticated consumers that often end in default judgments, garnishment of wages and liens on homes-even without actual proof of the debt. In this case, Cavalry has refused to become licensed as a collection agency and failed to disclose its business activities in response to our subpoena."
