CHARLESTON, W. Va. - West Virginia Attorney General Darrell McGraw reached an agreement Tuesday with a New York-based debt purchaser to cancel the debts owed by 861 consumers.
All totaled, Excalibur I will let go of more than $3 million in debt, dismiss 119 collection lawsuits it had filed and release any court judgments it had already obtained as a result of the settlement.
McGraw said the debt-purchasing industry requires strict oversight.
"The predatory lending practices of certain unscrupulous companies in the financial services industry has spawned a new industry -- the debt-purchasing industry," he said.
"This new industry buys defaulted consumer accounts for pennies on the dollar and then aggressively attempts to collect the debt, which often includes the filing of a lawsuit."
McGraw has been investigating the company since last year, and eventually discovered the company had been practicing without a collection agency license. It must obtain one before resuming its practices, while also refunding $27,611 of payments that it had collected.
"In many instances, debt purchasers pursue the wrong consumers and rarely have in their possession documents proving that the accounts are owed at all," McGraw said. "I commend Excalibur for entering into this agreement with our office that will afford additional protections to consumers in the future."