Joseph Bella, the operator of several collection agencies in the Buffalo, N.Y. area, agreed to pay $165,000 in restitution and penalties in a settlement announced Thursday by New York Attorney General Eric T. Schneiderman's office.

Bella's agencies were charged with violating the privacy of consumers by soliciting their personal information through employers and sending letters that purported to be from an attorney in order to collect.  

Since November 2008, Bella has operated various collection companies in the Buffalo area - including Check Systems LLC; Interchex Systems LLC; Goldberg Maxwell LLC; Mullins & Kane LLC; Morgan Jackson LLC and National Check Registry LLC - that the AG's office found had repeatedly violated the Fair Debt Collection Practices Act.

Bella operated several of these companies on a one-at-a-time basis for short periods, usually less than six months. He then would shut the companies down and start operations under a new name.

Bella’s collection companies routinely sent Verification of Employment forms to the employers of consumers, according to the settlement. Federal law prohibits collectors from communicating with employers except to obtain location information about the employee.

Nevertheless, Bella’s collection companies illegally sought information about consumers, including Social Security numbers, hourly wages, dates of hire and information on whether their consumer's wages were being garnished.

The form improperly implied that the collection companies would garnish the wages of consumers even though they had never obtained judgments and had no authority to do so.

“Across the state, we’ve worked aggressively to ensure that debt collectors who exploit desperate consumers and break the law pay a price for their behavior. In this case, we’re pleased that consumers who paid on payday loans will receive full restitution and that Bella will receive heavy penalties,” said Schneiderman. “With this action and many others, my office will continue to fight to protect New Yorkers from illegal business practices and stop companies that seek to prey upon consumers facing tough economic times."

Bella’s collection companies also routinely violated the law by sending letters to consumers under the name of an attorney, M. Robert Madia. Madia, however, did not have any direct personal involvement in the sending of the letters; had not reviewed the consumers' files before the letters were sent; had not determined that the letters should be sent, and did not know the identities of the consumers to whom the letters had been sent.

Despite the fact that Bella terminated Madia in November 2012, as late as February 2013, one of his companies continued to send letters to consumers from "Faith Galloway, Legal Assistant," that, according to the letters, were copied to the terminated Madia.

Finally, Bella’s companies collected on, or attempted to collect on, payday loans from New York State residents. Payday loans are illegal in New York State.

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