Recently, the Consumer Financial Protection Bureau (CFPB) in collaboration with the New York Attorney General announced the filing of proposed settlements against a group of debt collectors from Buffalo, New York, namely Douglas MacKinnon, Northern Resolution Group, LLC, Enhanced Acquisitions, LLC, Delray Capital, LLC, and Mark Gray, for their collective operations in the debt collection industry. As per the agreements, MacKinnon, along with Northern Resolution Group and Enhanced Acquisitions, faces an industry ban and is ordered to pay a sum of $60 million. Similarly, Delray Capital and Gray will also be banned from the debt collection industry, with additional financial penalties and redress judgments imposed on them.
In a legal complaint initiated in federal court in 2016, both the CFPB and the New York Attorney General charged these individuals and their companies with infractions under the Consumer Financial Protection Act of 2010, the Fair Debt Collection Practices Act (FDCPA), and specific New York state laws concerning the practices of consumer debt collection and related activities.
The allegations highlighted that Northern Resolution Group and Enhanced Acquisitions were founded and operated by Douglas MacKinnon, whereas Delray Capital was jointly managed by MacKinnon and Gray. The complaint detailed that since 2009, these entities purchased considerable amounts of consumer debt, subsequently inflated these debts, and employed illicit strategies to maximize their debt collection efforts. Moreover, MacKinnon is accused of establishing a network of over 60 additional debt collection firms to further pursue the collected debts, engaging in deceptive practices such as misrepresenting debt obligations to consumers, issuing unfounded legal threats, and impersonating official entities.
Under the proposed settlements, the defendants are to be permanently prohibited from engaging in any debt collection activities and are restricted from any forms of misrepresentation or omission associated with consumer financial products or services. Financially, the settlement requires MacKinnon, Northern Resolution Group, and Enhanced Acquisitions to allocate $40 million towards consumer redress and pay a civil money penalty of $10 million to both the CFPB and New York, totaling $20 million in penalties. For Gray and Delray Capital, the settlement outlines a redress judgment of $4 million and civil money penalties of $1 million to each the CFPB and the New York Attorney General, with full payment suspended contingent upon the payment of a nominal penalty to the CFPB and $10,000 dedicated to consumer redress.
For further details, please review the joint stipulation for MacKinnon, Northern Resolution Group, and Enhanced Acquisitions, their stipulated final judgment and order, the joint stipulation for Gray and Delray Capital, and the stipulated final judgment and order for Gray and Delray Capital.
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