New York AG settlement cancels debt

State Issues Debt Collection State Attorney General New York Consumer Finance

On December 29, the New York attorney general announced a settlement with a New York-based off-campus private student housing provider (respondent) for allegedly deceiving hundreds of students, primarily at a New York state college, since 2019. According to the assurance of discontinuance, the respondent, among other things: (i) routinely collected interested students’ information; (ii) persuaded students to sign leases without first determining certain qualifications; (iii) denied students access to housing; (vi) alleged students owed thousands in rent; and (v) referred students to debt collectors. The respondent also allegedly charged students excess rent and fees and disclosed to some students that they could get out of their lease if they found another student to take it over, but then unlawfully charged a $300 “delegation” fee. The respondent allegedly at times permitted some students to prepay rent if it believed they did not meet certain qualification criteria, in violation of state rent laws, and charged certain students excessive late fees for each month of rent that was not timely paid. The terms of the settlement cancels more than $200,000 in improper debts, recovers $65,958 in restitution, and imposes a $50,000 civil penalty on the respondent. The settlement also prohibits the respondent from committing fraudulent and predatory practices in the future.