Brian Fair was having a very bad day.
It is never good when the Attorney General of a state sues you. In this case, the Attorney General of Washington sued several companies Fair owns for violations of the Washington State Collections Agency Act.
Fair’s companies, which were all incorporated between 2004 and 2009, according to the AG’s office, were not registered until 2013.
Fair was a debt buyer. Like many in the receivables management industry, he bought old debt. Under Washington state law, no license is required to be a debt buyer. However, if a debt buyer is also going to act as a debt collector, they must be licensed.
The Washington AG alleged that Fair’s companies sued and obtained judgments against hundreds of Washington state residents before becoming licensed. According to the lawsuit, the companies are still attempting to collect on those old judgments.
The lawsuit also accuses those companies of engaging in illegal tactics to collect on those judgments, including threats to foreclose on debtor’s homes.
The Washington state Attorney General’s lawsuit is the latest in a series of aggressive actions regulators are taking against actors in the receivables management industry.
The lawsuit, which was just filed, and the defendants have not yet responded to, seeks restitution, civil penalties as well as attorney’s fees and costs for the state.
In another lawsuit, the Federal Trade Commission and the New York Attorney General, just settled a lawsuit with several defendants for unlawful tactics, including threatening to imprison debtors. Part of this settlement will be over $26 million in judgments and a number of the individual defendants will be permanently barred from the receivables management industry.
The old days are gone. Back then, a company could fly under the radar, then if caught, pay a fine. It was just a cost of doing business.
Regulators want to put rogue collections companies out of business and want to prevent their principals from ever working in receivables management again.
Compliance can be daunting. It can also be time consuming and if you are running a receivables management company, time is something you probably don’t have a lot of.
Capital Compliance Group can help. We can get you compliant in the states you operate in or want to operate in, at a cost far less than you are expecting. Capital Compliance Group can help keep you compliant as well.
Is compliance expensive?
Not nearly as expensive as the cost of being caught non-compliant.