New York AG Cracks Down on Debt Collectors

Businessman Stomping Out The CompetitionIt’s great to see that New York Attorney General Eric Schneiderman is picking up where former AG (now Governor) Andrew Cuomo left off. Buffalo is home base for countless debt collection agencies, many of which routinely flout the Fair Debt Collection Practices Act. Schneiderman recently announced a number of moves against the most egregious offenders.

The first involved Stephanie Lowinger, who pleaded guilty to misdemeanor fraud and was banned from debt collection in New York for life. She would threaten family members of those in the military, telling them that if they didn’t pay, the service member would be arrested by the military police and would be dishonorably discharged.

The second involved Frank Santiago, who is required to pay $65,000 in civil penalties. His collectors used an attorney’s name (John Nicolia) to threaten legal action and lied about imminent lawsuits. They also told consumers that the police would come to their homes and that their property would be seized. Santiago owns Eastern Asset Management and Northern Asset Management.

The third involved John Nicolia, who must pay a $20,000 civil penalty and is permanently banned from debt collection activities. Nicolia is the attorney Santiago kept on retainer, and apparently knew that Santiago’s collectors used his name to threaten people.

The fourth involved Richard and Peggy Cerrone, who must pay $85,000 in civil penalties. Their group of companies has been sued numerous times for violations of the FDCPA, and consumers have filed over 200 complaints against them. Their companies include the Southern Tier Agency, Check & Credit Reporting, Check & Credit Filing, and Cornerstone Resolution Group. They routinely threatened consumers with garnishment, arrest, and imprisonment.

New York Attorney General Sues Lawyer for Illegal Debt Collection Practices

justiceNew York Attorney General Andrew Cuomo filed a lawsuit against a New York lawyer who allegedly allowed a debt collection agency to use the lawyer’s name in order to intimidate and threaten consumers with bogus legal action. According to the lawsuit, John P. Nicolia was paid $141,000 by Eastern Asset Management debt collection agency, so that Eastern Asset Management could use his and his law firm’s name – without ever doing any actual legal work for the debt collector.

In a statement issued on Thursday, Cuomo said, “The lawsuit alleges that this attorney knowingly allowed a debt collection firm to use his name to threaten, intimidate, and harass consumers, while he sat back and profited without having to do any actual work. Our investigation into illegal debt collection practices has uncovered layer upon layer of abusive acts, and we will continue to root out the bad players in this industry.”

Both the federal Fair Debt Collection Practices Act and New York debt collection and consumer protection laws prohibit debt collection agencies from posing as an attorney or threatening legal action that cannot be taken. Cuomo’s suit alleges that Eastern Asset Management’s debt collectors told consumers they were calling from the Law Offices of John Nicolia and sent “settlement” letters to consumers saying that “…our legal counsel, John Nicolia, Esq. may review the status of your particular case at anytime.”

Kudos to Attorney General Cuomo, who has been vigilant in fighting illegal debt collection practices.

Illegal Threats by Eastern Asset Management

Tennessee’s News Channel 5 recently reported on an all-too-common practice by debt collection agencies that buy up old debts, and then try to collect whatever they can by whatever means possible. In this instance, Eastern Asset Management allegedly bought a six-year-old debt, and then illegally threatened the consumer with a variety of actions. The collector said papers had already been filed in court (which they hadn’t), that the consumer’s driver’s license would be revoked (ludicrous), and refused to provide the consumer with any proof that she did, indeed owe the debt. Thankfully, the consumer was smart enough not to fall for these tricks. What she may not have known, however, was that these tactics are a violation of the Fair Debt Collection Practices Act, and that she may have been entitled to $1,000 or more if she’d taken the collector to court.

Sergei Lemberg, Esq., focuses his practice on defending consumer rights in the areas of Fair Debt Collection Law, Consumer Fraud, Auto Warranty and Auto Injury litigation.

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