WASHINGTON (Reuters) - The U.S. consumer watchdog on Thursday said it had fined a group of New York-based debt-collection firms and their two owners more than $60 million to settle claims they inflated consumer debts and broke the law when attempting to collect the money.
The U.S. Consumer Financial Protection Bureau (CFPB) also said it had permanently barred the group of companies and their owners from acting as debt collectors, in a joint consent order with the New York Attorney General’s office.
Thursday’s order alleges that since at least 2009, the companies “purchased millions of dollars’ worth of consumer debt, inflated those consumer debts, and relied on illegal tactics to extract as much money as possible from consumers for their debts,” the regulator said.
The settlement with Northern Resolution Group, LLC, Enhanced Acquisitions, LLC, and Delray Capital, LLC and their owners Douglas MacKinnon and Mark Gray, resolves a lawsuit filed by the CFPB and the New York Attorney General’s office in 2016.
MacKinnon and Gray did not admit or deny the allegations.
MacKinnon as well as Northern Resolution Group, LLC, and Enhanced Acquisitions, LLC, agreed to pay $40 million in redress to consumers and a combined $20 million penalty to both the CFPB and the office of the New York Attorney General, the consent order said.
Gray and Delray Capital, LLC agreed to pay $4 million in redress and a combined $2 million penalty to the CFPB and the New York Attorney General’s office.
However, full payment of those amounts would be suspended subject to the defendants paying a $1 civil money penalty to the CFPB and $10,000 for consumer redress, the CFPB said.
Reporting by Katanga Johnson; Editing by Paul Simao