State AG Settles with Debt Collectors Over Licensing

West Virginia Attorney General Darrell McGraw has reached a settlement with two out-of-state debt collection agencies that were not licensed to collect in his state, according to the Wall Street Journal.

McGraw’s office said that the two New York companies were trying to collect debts from a payday lender that had been tossed out of the state last year. Payday lending is illegal in the state, and the two collection agencies — Northtown Capital Associates Inc. and Interstate Check Systems Inc. — also weren’t licensed as collectors.

The attorney general in May announced a similar settlement with two other collection agencies over payday loans.

“My office will continue its rigorous enforcement of these laws to ensure a level playing field for all legitimate agencies that collect debts in West Virginia,” said McGraw in a statement. “We will also take action to prohibit any collection agency, licensed or unlicensed, from collecting unlawful debts such as Internet payday loans.”

The two companies that settled Wednesday agreed to cancel some $11,000 in debts of West Virginia consumers and will pay the state $5,000 to cover investigation costs.