IMGCAP(1)]
Attorneys general in New York and Missouri yesterday announced they have filed lawsuits against collection agencies for allegedly demanding payment of debts not owed, among other violations.
In New York, Attorney General Andrew M. Cuomo is seeking to shut down Buffalo-based Benning-Smith Group and its 13 debt collection companies run by Omar Smith, Narvell Benning and Keith Marshall.
Cuomo said more than 850 consumer complaints have been filed with his office, the Federal Trade Commission and the Better Business Bureau alleging that Benning-Smith Group employees violated state and federal law by posing as law enforcement officials and threatening to arrest or physically harm consumers unless they made arrangements to immediately pay the company.
Cuomo's lawsuit also alleges that, in some instances, employees sexually harassed consumers. The attorney general said his investigation has identified more than 1,000 instances in which the Benning-Smith Group broke state and federal statutes.
"This company made lies, threats and abuse its calling cards in their efforts to manipulate and take advantage of consumers already facing tough economic times," Cuomo said in a prepared statement. As previously reported in CCR Newsline, yesterday's action is part of a larger investigation by Cuomo into unlawful debt collection practices.
Attempts by Collections & Credit Risk to reach Benning-Smith Group officials were unsuccessful. Phone numbers for Abrams Burke & Associates in Tonawanda and Brady & Caruso in Buffalo, two of the agencies run by Benning-Smith Group, have been disconnected.
In Missouri, Attorney General Chris Koster yesterday filed lawsuits against Norfolk, Va.-based Portfolio Recovery Associates (PRA) and Kansas City-based Professional Debt Management. According to Koster, PRA allegedly attempted to collect on accounts that already had been paid in full or have been discharged in bankruptcy.
Judith Scott, executive vice president and general counsel for PRA, says the company cannot comment on any ongoing litigation. Furthermore, she says the company has not been served any legal documents and did not receive any advance communication from the attorney general's office concerning the lawsuit.
"Up to this point, we have enjoyed what we have considered to be a positive relationship with the Missouri Attorney General's Office, and were quite surprised yesterday to hear from reporters that we are the subject of a lawsuit," Scott tells Collections & Credit Risk.
"We have not reviewed any concrete allegations. But even without seeing the actual allegations, we can say that the statements made in the attorney general's press release certainly do not reflect our business, and we believe that our business practices comply with Missouri law," Scott says.
Koster alleges the company tried to collect from the wrong consumer or for the wrong amounts. He said the company threatened to garnish consumers' Social Security checks, which they have no authority to do, and refused to provide consumers with proof that a debt is valid.
Professional Debt Management allegedly used scare tactics by leaving messages on consumers' phones that there is an emergency, according to Koster, and the company attempts to collect on accounts already paid or from the wrong party.
"I am asking the court to issue a permanent injunction prohibiting these companies from violating consumer protection laws and to order that they provide full restitution to the people they have harmed," Koster said in a prepared statement. Koster also is asking that the court impose monetary penalties and require the companies to pay all court costs.
According to the lawsuit filed by Cuomo in New York, Benning-Smith Group operated under several names, including: Abrams, Burke & Associates; Benning and Smith Acquisitions Inc.; Brady and Caruso, LLC; DebtPayments.com; DebtPayments.com LLC; Fredericks, Goldstein & Zoe; Graham, Noble & Associates Bookkeeping; Graham, Noble & Associates LLC; Graham, Beagle & Associates LLC; Kingman, Cole and Associates LLC; Marshall and Ziolkowski Enterprise LLC; Marshall Ziolkowski Acquisitions LLC; Lansky, Goldstein, Zoe; OLS Payment Services; and University Debt Collection.
Benning-Smith Group collectors, according to Cuomo, impersonated law enforcement officials and demanded payment for non-existent debts or substantially inflated the amount owed on an actual debt.
