InfoBytes Blog
North Carolina issues enforcement order against debt collection operation
On October 10, the North Carolina attorney general announced a consent judgment with the president and CEO of two debt collection companies (collectively, “defendants”). According to the AG, in 2019, the AG sued the defendants for allegedly engaging in illegal debt collection practices. The AG alleged that from 2012 to 2018, the CEO used his debt collection companies to buy unpaid consumer debt from a national corporation that sells rent-to-own household furniture, appliances, and electronics. Since 2018, he allegedly collected or attempted to collect on these unpaid debts from North Carolina consumers, even though he did not have the correct registration or permits to operate in the state. The AG further noted that the defendants allegedly sent customers simulated court notices that were not from the court and claimed they had committed a criminal violation by failing to return rented property. When consumers contacted the companies they received debt collection threats. The defendants also filed criminal complaints in several counties that resulted in actual criminal summonses being issued against customers. Among other things, the defendants are ordered to forgive the debts of 20,000 individuals, refund 650 consumers, and pay fines. The defendants are also permanently banned from collecting debts in North Carolina, and are required to report compliance to the AG’s office.