A Buffalo-based debt collection operation accused of employing shady practices that violated federal and state law and illegally gathering millions of dollars from consumers has been halted by a U.S. District Court judge upon request by State Attorney General Eric T. Schneiderman and the Federal Trade Commission.
Joseph C. Bella III and Luis Shaw, both of Buffalo, and Diane Bella of Florida, who allegedly operated the company under nine different names to evade detection, were charged with deceiving consumers, making false accusations of check fraud and subsequently threatening them if the purported debt was not paid immediately.
Since February 2010, the three collected at least $8.7 million while violating the Federal Trade Commission Act, the Fair Debt Collection Practice Act and several state laws, according to a complaint by Schneiderman and the FTC.
The company names the collection operation worked under are: National Check Registry LLC; eCapital Services LLC; Check Systems LLC; Interchex Systems LLC; American Mutual Holdings Inc.; Goldberg Maxwell LLC; Morgan Jackson LLC; Mullins & Kane LLC; and Buffalo Staffing Inc.
Under U.S. District Judge Richard J. Arcara’s preliminary injunction, the operation’s assets have been frozen and a receiver was put in place to run the business on a temporary basis.
Interviews with targeted consumers conducted by Schneiderman and the FTC found that the accused collectors withheld information.
Doubtful consumers who believed they did not owe debt were not offered an explanation about the reason for collection, according to the complaint.
If they did not pay, consumers were told they could face arrest, imprisonment, lawsuits or loss of wages, Schneiderman and the FTC said.
Collectors allegedly contacted consumers’ family members, friends and employers with their debt claims.
“All too often New Yorkers are relentlessly harassed by predatory, abusive debt collectors,” Schneiderman said in a news release issued Monday. “My office, along with partners like the Federal Trade Commission, will keep fighting to protect hardworking consumers and put a stop to unfair financial bullying once and for all.”
According to Schneiderman and the FTC, Joseph C. Bella III signed an agreement with the state in October 2013 to stop the illegal debt collection practices.
“These debt collectors continued to harass consumers and violate the law after the validity of the debt was called into question, and after the New York Attorney General’s Office ordered them to stop,” said Jessica Rich, director of the FTC’s Bureau of Consumer Protection. “By working together with our state partners, we can leverage our resources to stop these illegal tactics.”