On May 18, the New York State Department of Financial Services (DFS) announced a consent order with a Virginia debt buyer for collecting on illegal payday loans from New York consumers, in violation of the Fair Debt Collection Practices Act and New York state law. Between 2012 and 2014, the debt buyer allegedly attempted to collect on 537 unenforceable payday loans, successfully collecting on 52 loans. The debt buyer represented to DFS that it had ceased collection of all payday loans in New York after DFS released a circular letter in February 2013, reminding debt collectors that such loans are void and unenforceable. Following that letter, the debt collector collected on only three usurious New York payday loans, due to a system breakdown in early 2014.
The debt buyer agreed to discharge its remaining 2,801 active payday loan accounts, totaling $52,941 in debt, and issue refund checks for interest collected during this period, totaling $66,129. The debt buyer also consented to cease selling or assigning usurious payday loans, and to make a request that credit reporting bureaus remove all negative information associated with those accounts. Finally, the debt buyer agreed to pay a $25,000 penalty to the Department.