BUFFALO, N.Y. (CN) – Attorney General Andrew Cuomo shut down a western New York debt collection ring that used scare tactics – including posing as law enforcement – to intimidate people into paying debts, which in many cases they did not owe. Cuomo obtained court orders barring the three principals from operating their businesses and secured $275,000 in restitution for victims.
Tobias Boyland, Kayla Pritchett and Dorian Wills operated at least nine debt collection companies in western New York.
“These individuals used a business model of intimidation, illegal impersonation and predatory tactics to go after people’s money under the guise of debt collection,” Cuomo said. “The leaders of this scheme are now barred from the business of debt collection, and they have to pay back consumers who were terrified and coerced into paying money that many did not even owe.”
According to hundreds of complaints filed by consumers across the country, Boyland’s employees routinely posed as law enforcement officials and threatened to throw alleged debtors in jail unless they made arrangements to pay the company immediately, prosecutors said.
The employees also falsely informed people that they were being sued in civil court.
“Collectors demanded payment for nonexistent debts, attempted to collect payments for debts that had already passed the statue of limitations, or substantially inflated the amount owed,” Cuomo said. The companies disguised their phone numbers and addresses to prevent consumers from knowing what state the calls were coming from.
Boyland previously served time in prison for armed robbery and drug dealing, prosecutors said.
His Buffalo-area collection agencies were Central Resource Management, Final Claims Asset Locators, Final Control Asset Locators, Interchange Payment Solutions, Next Step Services, Portfolio Asset Assurance, Silverbay Services and Teleport.
Many consider the Buffalo region the epicenter of debt-collection abuse. There are more than 230 collection companies in upstate New York, according to the Better Business Bureau.
Call centers filled the void left by departed or defunct manufacturers that historically employed a large number of people in the area.
Buffalo is the third poorest city in America with a population of at least 250,000, according to a 2009 U.S. Census report; slightly more than 30 percent of its residents live in poverty.
The Better Business Bureau gave 84 collection companies in the upstate region an “F” rating. It logged nearly 2,000 complaints from consumers about collection agencies in the upstate region last year.
Around 60 Fair Debt Collection Practices Act lawsuits have been filed in the Western and Northern Districts of New York Federal Courts so far in 2010.
Common complaints include creditors posing as lawyers, threatening jail time and lawsuits, calling people at work, and calling the friends, family and neighbors of alleged debtors.