New York Attorney General Letitia James and the Consumer Financial Protection Bureau said Monday that they have shut down a debt-collection operation that had been collecting debts using illegal measures.
The operation, based in Getzville, N.Y., had allegedly been targeting consumers nationwide since 2015. Several companies participated in the operation — including JPL Recovery Solutions, LLC and five affiliates, authorities said.
Authorities said the operation inflated the debt amount and falsely threatened consumers with imprisonment if they did not pay. The company also allegedly harassed consumers’ inner circles, including their friends and family, as well as their Facebook FB, +0.60% friends, to pressure consumers to pay, and would not stop even after consumers said to stop contact, authorities said.
The operation reached around 293,000 consumers and collected $93 million gross revenue from 2015 to 2020, the New York AG and CFPB said.
James and the consumer watchdog ordered the operation to pay $4 million for damage and penalties, and banned the operation from the debt collection industry.
(Attempts to reach JPL Recovery Solutions were unsuccessful, and the company’s website is no longer live.)
“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.”
James’ promised to target illegal debtors when she ran for attorney general.
“Predatory debt collectors make their profit by targeting hardworking consumers and then illegally saddle them deeper into debt. These debt collectors used harassing calls and false threats to coerce consumers to pay, actions that are both illegal and downright shameful, ” James said.
“This debt collection operation used illegal and deceptive tactics to prey on consumers, and now they are paying the price for the harm they caused,” she added.