June 23, 2009
New York Attorney General Andrew M. Cuomo today shut down a nationwide collection operation that consisted of at least nine debt collection companies across Western New York, run by Buffalo resident Tobias Boyland, the latest in Cuomo's probe of debt collection practices.
According to hundreds of consumer complaints filed with law enforcement agencies across the country, Boyland's employees violated state and federal law by routinely posing as law enforcement officials, threatening to arrest consumers and throw them in jail unless they made arrangements to pay the company immediately.
Under the terms of the court order obtained today by Cuomo's office in Buffalo Supreme Court, Boyland's operation will shut down all of its companies in the Buffalo area. Attorney General Cuomo also announced that his office executed search warrants on four of the operations known locations and on Boyland's residence. When investigators from the Attorney General's Office arrived at the residence, they found a loaded, .380 semi-automatic pistol on Boyland's person. Boyland was taken into custody by the Erie County Sheriff and the Office of the Erie County District Attorney will handle the resulting gun-possession case.
"Plain and simple, this company was run by people who lied, bullied and preyed on vulnerable Americans struggling to resolve their financial situation," Cuomo said. "Pretending to be a police officer, threatening to throw consumers in jail — these practices are as despicable as they are illegal."
According to Cuomo's lawsuit, Boyland, a convicted felon, and three other individuals ran numerous debt collecting companies that operated out of at least four locations in Western New York.
The debt collection agencies operated under several names across the Buffalo area, including: Central Resource Management, Final Claims Asset Locators, Final Control Asset Locators, Interchange Payment Solutions, Next Step Services, Portfolio Asset Assurance, Silverbay Services, and Teleport.
Their collectors routinely made scripted telephone calls designed to intimidate consumers into paying their debts. The debt collectors pretended to be law enforcement officers and threatened consumers with arrest and incarceration if they failed to pay. These employees also falsely informed consumers that they were being sued in civil court.
Cuomo's investigation revealed that collectors regularly demanded payment for non-existent debts, demanded payments for debts that had already passed the statute of limitations, or substantially inflated the amount owed on an actual debt.
Using their false law enforcement identities, collectors coerced and cajoled terrified consumers into agreeing to make payments. Frightened at the prospect of arrest and humiliation, consumers authorized withdrawals from their checking accounts, sent Western Union moneygrams and/or money orders out of fear. Consumers were intentionally given misleading names, addresses and telephone numbers that led them to believe the businesses were located far from the Buffalo area.
The federal Fair Debt Collection Practices Act, the New York State debt collection and consumer protection laws prohibit the following conduct: posing as an attorney, threatening lawsuits or other legal action which cannot be taken, saying a consumer committed a crime or will be arrested and talking with third parties except to get location information. The law further requires collection agencies to send a written notice within five days of initial communication with the consumer explaining how he or she can dispute the debt. If properly disputed, the collection agency must stop all collection attempts and send verification.
Earlier this month, Cuomo announced settlements with three Western New York-based debt collection companies to reform their deceptive methods. He also subpoenaed nearly twenty companies and law firms operating as debt collectors throughout the state. His office shut down two collectors for threatening and intimidating consumers into paying debts that they did not owe. In early May, Cuomo announced a lawsuit against two debt settlement companies for fraudulent business practices and false advertising by selling misleading debt settlement plans that very rarely deliver the promised benefits to consumers dealing with debt.
