A Liverpool, N.Y. collection agency that allegedly engaged in threatening and abusive practices must close permanently and pay back $400,000 to debtors, according to a court order.

Med-Rev Recoveries didn't admit to the allegations outlined in a lawsuit brought by New York Attorney General Eric Schneiderman’s office. The lawsuit states that the collection agency often browbeat, cursed and demeaned people into paying overdue medical bills. 

Med-Rev's owner and past president agreed to begin paying back overcharges to debtors, according to a court order signed by New York Supreme Court Justice James Murphy. The company also agreed to pay the state an additional $150,000 in penalties and costs. The order requires Med-Rev to issue refund checks to consumers who were charged a fee for paying with a credit card and to consumers who paid a collection fee to Med-Rev in connection with Monroe Ambulance accounts. Under federal and state collection laws, a collector may only charge additional fees if such fees are authorized by the consumer's original contract with the creditor. Med-Rev officials weren’t immediately available for comment Thursday.The company in some case failed to provide debtors with paperwork explaining the amounts owed, according to Schneiderman's suit. Med-Rev also was slow to send the money it collected from individuals back to the hospitals, government offices, doctors and veterinarians that were owed the money, according to the papers.

Others paid the company only to later learn that Med-Rev hadn’t updated its financial records, meaning some people were denied health care, according to Schneiderman’s office.

Med-Rev faced another investigation by former New York Attorney General Andrew Cuomo in 2009. At the time, the company agreed to not collect any money other than what was "legally chargeable" and to provide the debtors with written proof of the amount owed, according to legal papers. But new complaints against Med-Rev began piling up with Schneiderman's office and the Better Business Bureau leading to a lawsuit against the firm in February. 

Company President Jaime Fortino resigned after the lawsuit was filed.


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