CFPB and NY Attorney General File Debt Collection Suit

November 2, 2016

On Wednesday, November 2, 2016, the CFPB, in partnership with the New York Attorney General, filed a lawsuit in a federal district court against the leaders of an alleged debt collection scheme based out of Buffalo, N.Y. The lawsuit alleges Douglas MacKinnon and Mark Gray operate a network of companies that harass, threaten, and deceive millions of consumers across the nation into paying inflated debts or amounts they may not owe. The Bureau is seeking to shut down this illegal operation and to obtain compensation for victims and a civil penalty against the companies and partners.

“Our lawsuit asserts that millions of consumers were harassed, threatened, and deceived as part of a massive scheme to collect inflated debts,” said Director Cordray.  “Today we are taking action against the ringleaders of this operation so they can no longer prey upon vulnerable consumers. We are pleased to be working in partnership with New York Attorney General Schneiderman to hold these companies accountable.”

“Living with debt is difficult enough as it is, without the added stress of being harassed and threatened by debt collectors,” Attorney General Schneiderman said.  “These collection shops inflated debts of their victims.  This suit sends the message that debt collectors that employ abusive tactics will be held accountable.”

The CFPB alleges the defendants violated the Fair Debt Collection Practices Act. The CFPB and the New York Attorney General also allege the defendants violated the Dodd-Frank Wall Street Reform and Consumer Protection Act, which prohibits unfair and deceptive acts or practices in the consumer financial marketplace.  Specifically, the CFPB and the New York Attorney General allege that MacKinnon, Gray, and their network of debt collection companies:

  • Inflated consumer debts and misrepresented amounts consumers owed,
  • Falsely threatened legal action, and
  • Impersonated law-enforcement officials, government agencies, and court officers.

The complaint also alleges repeated fraudulent acts and deceptive acts or practices in violation of New York law, as well as violations of New York state debt-collection law.