A New York debt collection network will pay more than $60 million in fines and exit the industry under settlements announced Thursday by the state’s attorney general and the Consumer Financial Protection Bureau (CFPB).
Debt collectors Douglas MacKinnon and Mark Gray — along with their companies, Northern Resolution Group, Enhanced Acquisitions and Delray Capital — agreed to settle 2016 charges of violating federal and New York state consumer protection laws.
{mosads}The CFPB and New York attorney general charged MacKinnon, Gray and their companies in 2016 with using deceptive and abusive practices to collect millions of dollars in debt purchased by their network of collection firms.
The network of 60 debt collection companies allegedly violated federal and state regulations for debt collection by using “illegal tactics to extract as much money as possible from consumers for their debts,” according to the CFPB.
Since 2009, the group allegedly inflated the amount of debt owed by consumers, sought payment for debt it was not entitled to collect, threatened legal action and impersonated law enforcement officials while seeking payment.
Under the proposed settlement, MacKinnon, Northern Resolution Group and Enhanced Acquisitions would pay $40 million in repayment consumers and $20 million civil money penalties split between the CFPB and New York attorney general.
The settlement with Gray and Delray Capital calls for $4 million in consumer compensation and $2 million in penalties split between the CFPB and New York attorney general. But due to a lack of financial resources, the parties would be permitted to pay just $1 in fines to the CFPB and $10,000 in redress for customers.