West Virginia Attorney General Sues Two ARM Companies

http://www.insidearm.com/news/00040010-west-virginia-attorney-general-sues-two-a/

The office of West Virginia Attorney General Darrell McGraw announced Thursday that it has filed lawsuits against two accounts receivable management companies, including one of the largest debt purchasers in the U.S.

In a press release issued by his office, McGraw said that Cavalry Portfolio Services, based in Hawthorne, N.Y., and Seattle Service Bureau, Inc. of Shoreline, Wash., which does business as National Service Bureau, were not licensed to collect debt in West Virginia and did not cooperate with an investigation, prompting the lawsuits.

The release said that Cavalry, one of the largest debt buyers in the country, purchased an unknown number of charged-off credit card accounts and filed numerous suits in West Virginia without a license to collect the debts as required by state tax department regulations. McGraw did not name any other alleged violations of law and did not disclose what relief his lawsuit is seeking.

But Cavalry tells a completely different story.

In a statement issued to insideARM.com, the company said that it disputes the accuracy of statements made in McGraw’s announcement.

“We maintain all licenses required by law to collect debt in West Virginia and all other states, and we operate in West Virginia in a legal and appropriate manner,” the company said. “Cavalry cooperated fully with the Attorney General’s office, and responded in a timely way, through counsel, to the subpoenas. Cavalry plans to vigorously defend itself against these allegations.”

Cavalry noted that it had not seen the attorney general’s complaint, so it did not know the full scope of the allegations, only what was included in the press announcement.

Cavalry said that since 2002, it has purchased more than $20 billion in face value consumer debt and operates nationally from five locations.

McGraw also alleged that debt collection agency National Service Bureau, in addition to being unlicensed in West Virginia, “added illegal interest, collection fees and other charges to debts allegedly owed by West Virginia consumers.” But the announcement does not specify any other collection abuses or violations.

The AG’s office claims that NSB also did not cooperate with an investigation. The announcement does not specify any relief sought by the AG in his lawsuit against the firm.