The Consumer Financial Protection Bureau filed proposed settlements with debt collectors Douglas MacKinnon, Northern Resolution Group, LLC, Enhanced Acquisitions, LLC, Delray Capital, LLC, and Mark Gray, all based in Buffalo, N.Y.
Under the first proposed settlement — joined by the New York Attorney General — MacKinnon, Northern Resolution Group, and Enhanced Acquisitions will be banned from the industry and pay $60 million ($40 million in restitution to consumers and $10 million each to the CFPB and the N.Y. AG). Under a separate settlement, Delray Capital and Gray will be banned from the industry and a judgment for civil money penalties and redress will be entered against them.
In the complaint filed in federal court in 2016, the bureau alleged the defendants violated the Consumer Financial Protection Act of 2010 and the Fair Debt Collection Practices Act.
The complaint alleged that since at least 2009, the companies together purchased millions of dollars’ worth of consumer debt, inflated those consumer debts, and relied on illegal tactics to extract as much money as possible from consumers for their debts.
MacKinnon also allegedly set up a network of at least 60 additional debt collection firms to collect on the debt owned or placed by Northern Resolution Group, Enhanced Acquisitions, and Delray Capital.
The bureau said MacKinnon, Gray, and their network of debt collection companies misrepresented to consumers that they owed sums they did not owe, were not obligated to pay, or that the companies did not have a legal right to collect; falsely threatened consumers with legal action that the collectors had no intention of taking; and impersonated law enforcement officials, government agencies, and court officers.
Under the terms of the proposed settlement with Gray and Delray Capital, the order would impose a judgment for redress of $4 million, a judgment for civil money penalties of $1 million to the bureau, and a judgment for civil money penalties of $1 million to the New York Attorney General. Full payment of those amounts would be suspended subject to those defendants paying a $1 civil money penalty to the bureau and $10,000 for consumer redress.