A predatory debt collection operation is being shut down for harassing consumers, the Consumer Financial Protection Bureau and New York attorney general announced Monday.

The debt collection operation was made up of several companies, including JPL Recovery Solutions, which used misleading and abusive tactics to collect millions of dollars from hundreds of thousands of customers. They included making false threats, inflating debt amounts, and contacting family members, co-workers, and friends to harass consumers. 

In addition to closing, the companies are being fined $4 million. Half of the $4 million will go to the state of New York and half to the CFPB. If the defendants don’t pay in a timely manner, they’ll be required to pay another $1 million.

“It is illegal for debt collectors to orchestrate smear campaigns using social media to extort consumers into paying up,” said CFPB Director Rohit Chopra. “Our action with the New York Attorney General bans the ringleaders of this operation from the industry to halt further misconduct.”

“Predatory debt collectors make their profit by targeting hardworking consumers and then illegally saddle them deeper into debt,” said Attorney General Letitia James. “These debt collectors used harassing calls and false threats to coerce consumer to pay, not only is that illegal, it’s also downright shameful.”

The debt collection operation purchased defaulted consumer debt for pennies on the dollar. The debt came from high-interest personal loans, payday loans, credit cards, and other sources. The operation then attempted to collect debts from about 293,000 consumers, generating gross revenues of about $93 million between 2015 and 2020. 

The CFPB and the New York attorney general allege that the owners, managers, and companies used the following illegal tactics to collect debt:

• Falsely claimed arrest and imprisonment: The collection operation threatened people with arrest and imprisonment if they didn’t make payments. Consumers aren’t subject to arrest or imprisonment for not paying debts.
• Lied about legal action: The operation falsely threatened people with legal action, including wage garnishment and property seizures. However, the companies never sought or obtained any legal judgments.
• Inflated and misrepresented debt amounts owed: The defendants lied about debt amounts owed to convince consumers that paying the amounts they actually owed would be a discount. To pressure consumers further, collectors said the offers would only be available for a short time. 

• Created ‘smear campaigns’: Using social media and other methods, the collectors pressured consumers to pay by contacting and disclosing the debts to family members, ex-spouses, employers, co-workers, landlords, Facebook friends, and others. The operation did this even after collectors were told by consumers to stop contact.
• Harassed people with repeated phone calls: The collectors repeatedly called consumers many times every day for a month or longer. The operation instructed its collectors to let the person hang up on each call, so they could pretend in their call logs that they were disconnected, and then could call back the next day. The collectors also used insulting and belittling language, and engaged in intimidating behavior when calling. 
• Failed to provide legally required disclosures: The operation didn’t provide people with the required notices, which describe their rights. When consumers asked for the notices, some collectors refused to provide them.

The defendant companies are JPL Recovery Solutions; Regency One Capital; ROC Asset Solutions, which does business as API Recovery Solutions and Northern Information Services; Check Security Associates, which does business as Warner Location Services, Pinnacle Location Services, and Orchard Payment Processing Systems; Keystone Recovery Group; and Blue Street Asset Partners. The individual defendants are owners Christopher Di Re, Scott Croce, and Susan Croce, as well as Brian Koziel and Marc Gracie, who acted as managers of some or all of the companies.

Consumers can submit complaints about debt collection activities, or about financial products or services by visiting the CFPB’s website or by calling 855-411-2372.