BUFFALO, N.Y. (WKBW) — The New York State Attorney General has announced a $60 million settlement that will close a Buffalo-based debt collection company. Three debt collection companies in total make-up the $66 million settlement.
Douglas MacKinnon, who owns Northern Resolution Group and Enhanced Acquisitions, will be required to pay back millions of dollars in restitution and penalties. Delray Capital, a Toronto-based company owned by Mark Gray, was imposed $6 million in penalties, but that was suspended to $10,000 due to an "inability to pay."
"This was an elaborate and unscrupulous rip off scheme," Attorney General Letitia James said.
According to Attorney General James, the debt collection companies caused $200 to be added to the debts they purchased and placed for collection. Collectors then demanded consumers to pay thousands of dollars they did not legally owe. The settlement also alleges collectors told consumers they would be arrested for check fraud. Collectors would spoof calls and make it appear government agencies were calling consumers.
“There is zero tolerance for individuals who use illegal and unconscionable tactics to cheat consumers out of their hard-earned money,” said Attorney General Letitia James. “Not only did the defendants force consumers to pay more than they owed, but they falsely threatened to have consumers arrested for not complying with these predatory practices. This settlement demonstrates our commitment to protecting consumers and I thank the CFPB for their partnership to stop this exploitative scheme.”
The settlement bans MacKinnon, Gray and their companies from the debt collection industry.
Dennis Vacco, an attorney for MacKinnon released this statement:
Our clients entered into Stipulation agreeing to the entry of a $60 million judgment. The $60 million represents the full amount of damages which the Government was seeking through the litigation. Once the court accepts the Stipulation and enters the judgment, the Government will need to commence separate proceedings to enforce the judgment.
Mr. MacKinnon wanted to put this matter behind him and avoid the ongoing cost of litigation and to allow him to move onto other business interests. He was not required to pay money at this time pursuant to the terms of the Stipulation.
Joseph Makowski, an attorney for Gray, said his client has "no admission of liability," is "satisfied with the settlement" and is "looking forward to moving on with his family."