On May 18, the New York State Department of Financial Services (DFS) announced a consent order with a debt buyer for the purchase and collection of allegedly illegal payday loans made to New York consumers. , in violation of the Fair Debt Collection Practices Act and New York State Law. The settlement requires the buyer of the debt to repay approximately $ 3 million in restitution and represents the Department’s first settlement involving restitution on behalf of New York consumers related to payday loans.
According to the DFS, between 2007 and 2014, the debt buyer attempted to collect 7,325 payday loans, successfully recovering payments on 4,792 of those debts. The debt buyer has agreed to pay off its 2,801 active payday loan accounts, totaling $ 2.26 million in debt, and to issue checks for repayment of interest on the 4,792 loans. during this period, totaling $ 724,000. The debt buyer also agreed to stop selling or granting payday loans, to ask the credit bureaus to remove all negative information associated with these accounts, and to reverse any judgment obtained on these accounts. accounts. Ultimately, the purchaser of the debt agreed to pay a civil fine of $ 200,000 to the Department.