Connecticut Department of Banking imposes $200K penalty and restitution order on collector
Collection agency compliance teams must not collect in Connecticut without a license
Change
Connecticut Department of Banking directed a respondent to cease unlawful debt collection, imposed a $200,000 civil penalty due within 45 days, and required refund of all payments collected from Connecticut consumers since April 1, 2020 with interest and evidence of refunds to the department.
Why it matters
Operating as a consumer collection agency in Connecticut without a license violates the department's order, state collection statutes and the Fair Debt Collection Practices Act (FDCPA) and is subject to enforcement. The order identifies false attorney attribution, misrepresentations of debt status, and threats of unavailable legal action as prohibited conduct enforceable by the department.
Implications
- — Collection agency operators in Connecticut must immediately stop collecting consumer debts unless they hold a Connecticut collection agency license — failure risks civil penalties, restitution orders and further enforcement.
- — Compliance teams at firms handling Connecticut consumer accounts must immediately remove or cease using communications that falsely claim attorney involvement, misrepresent account status, or threaten unavailable legal action — failure exposes the firm to state statute and FDCPA enforcement, including restitution.
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Source
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