BUFFALO, N.Y. (Legal Newsline) - New York Attorney General Eric Schneiderman announced on Friday that he is cracking down on several Buffalo-area debt collectors that allegedly preyed on military personnel and vulnerable consumers.
Schneiderman's office convicted a debt collector, banned an attorney from the debt collection business and reached settlements with three other debt collectors.
The settlements involved businesses that allegedly made misrepresentations, threatened consumers and violated consumers' rights by calling them at their places of employment.
"These individuals preyed on vulnerable consumers and military personnel who were already struggling financially, by using scare and intimidation tactics," Schneiderman said.
"Today's settlements send a strong message that this office will not tolerate collectors intimidating consumers, or attorneys improperly lending their names to debt collectors."
Frank Santiago, the owner of Eastern Asset Management and Northern Asset Management, will pay $60,000 in civil penalties. Santiago must also reform his debt collection practices due to allegedly using attorney John Nicolia's name to threaten consumers with legal action.
Santiago collectors allegedly told consumers a lawsuit was about to be filed against them, their property would be seized or that police were going to be sent to their homes.
Nicolia allegedly knew of Santiago's deception and is now permanently banned from engaging in any debt collection activities. He is also required to pay a civil penalty of $20,000.
Companies owned by Santiago and Nicolia have been sued more than 33 times in 16 states for violating state and federal debt collection laws. Numerous complaints have also been filed in against them.
A settlement agreement with Richard and Peggy Cerrone requires the couple to pay $85,000 in penalties. The two must also make significant steps in cleaning up their business practices.
Richard Cerrone owns and operates the Southern Tier Agency Inc., Check & Credit Reporting Inc., and Credit & Check Filing Inc. Peggy Cerrone owns and operates the Cornerstone Resolution Group Inc.
The companies owned by the Cerrones allegedly violated the Federal Fair Debt Collection Practices Act by having agents call consumers at their places of employment. The debt collectors allegedly threatened the consumers with arrest, imprisonment, garnishment of wages and freezing of bank accounts.