National Corrective Group, Inc. (NCG), American Justice Solutions, Inc. d/b/a Corrective Solutions, et al.
Documents in this case
Case summary
CFPB took action against the National Corrective Group, a nationwide debt collection operation and its chief executive officer for using deceptive threats of criminal prosecution and jail time in order to intimidate consumers into paying debts for bounced checks.
Complaint ()
PDF of this document (24 pages)
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IN THE UNITED STATES DISTRICT COURT
DISTRICT OF MARYLAND CONSUMER FINANCIAL PROTECTION BUREAU, 1700 G Street NW
Washington, DC 20552
Plaintiff, CIVIL ACTION NO.
Vv.
NATIONAL CORRECTIVE GROUP, INC., a Delaware corporation, also d/b/a
CorrectiveSolutions, 910 Calle Negocio, San Clemente, CA 92673
AMERICAN JUSTICE SOLUTIONS, INC, a Delaware corporation, also d/b/a
CorrectiveSolutions, 910 Calle Negocio, San Clemente, CA 92673
VICTIM SERVICES, INC.
a Delaware corporation, 910 Calle Negocio, San Clemente, CA 92673
and
MATS JONSSON, individually and as a principal of National Corrective Group, Inc., American Justice Solutions, Inc., and Victim
Services, Inc., 910 Calle Negocio, San Clemente, CA 92673
Defendants.
Ne me ee a a a ee ee a ee i” ee” ie” ee” Ne” Ne” ee” Se” Si” Se” rel” et” Sas” et” el el” ee! Se” Nee”
Complaint for Permanent Injunction and Other Equitable Relief
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Plaintiff, the Consumer Financial Protection Bureau (Bureau) for its complaint against Defendants National Corrective Group, Inc., doing business as CorrectiveSolutions (NCG); American Justice Solutions, Inc., doing business as CorrectiveSolutions (AJS); Victim Services, Inc., (VSI); and Mats Jonsson (Jonsson), alleges as follows:
1.. The Bureau brings this action under Sections 1031(a), 1036(a), 1054, and 1055 of the Consumer Financial Protection Act of 2010 (CFPA), 12 U.S.C. §§
5531 (a), 5536(a), 5564(a), and 5565, and Sections 807 and 809 of the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. §§ 1692e and 1692g, to obtain permanent injunctive relief, restitution, disgorgement, civil money penalties, and other relief for violations of the CFPA and FDCPA by NGG, AJS, VSI, and Jonsson (collectively, Defendants). Unfair, deceptive, and abusive acts or practices in violation of the CFPA are prohibited. 12 U.S.C. §§ 5531(a) and 5536(a)(1). The FDCPA prohibits, among other things, the use of any false, deceptive, or misleading representation or means in connection with the collection of any debt. 15 U.S.C. §
1692e.
JURISDICTION AND VENUE
2. This Court has subject-matter jurisdiction over this action because it is
brought under Federal consumer financial law, 12 U.S.C. § 5565(a)(1), presents a
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federal question, 28 U.S.C. § 1331, and is brought by an agency of the United States, 28 US.C § 1345.
3. Venue is proper in this District because a substantial amount of the transactions, acts, practices, and courses of conduct constituting violations of Federal consumer financial law occurred within this district. 28 U.S.C. §§ 1391(b) and (c), and 12 US.C. § 5564().
PLAINTIFF
4, The Bureau is an agency of the United States. 12 U.S.C. § 5491 (a). It has independent litigating authority, including the authority to enforce the CFPA and the EDCPA 12 US.C. § 5564(a)-(b).
DEFENDANTS
5. Defendant National Corrective Group, Inc., which also does business as CorrectiveSolutions, is a for-profit corporation, incorporated in the state of Delaware with a principal place of business in San Clemente, California. It is a private debt collection company that, until June 2014, specialized in administering bad check diversion programs on behalf of state and local prosecutors’ offices and collecting dishonored check debt from consumers on behalf of retail merchants. It does business in the states of Maryland, Colorado, California, Florida, Michigan, New
Mexico, Nevada, Illinois, Indiana, Iowa, and Pennsylvania, among others.
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6. Defendant American Justice Solutions, Inc., which also does business as CorrectiveSolutions, is a for-profit corporation, incorporated in the state of Delaware with a principal place of business in San Clemente, California. It is a private company that assumed the business operations of National Corrective Group, Inc. in June 2014.
7. Defendant Victim Services, Inc. is a for-profit corporation, incorporated in the state of Delaware with a principal place of business in San Clemente, California. It is a private company that acquired the assets and assumed the business operations — of National Corrective Group, Inc., in June 2014.
8. Defendant Mats Jonsson is NCG’s Chief Executive Officer and previously its Chief Operating Officer. He has managerial responsibility for NCG and materially participated in the conduct of its affairs, including its collection of bad checks. He currently owns and manages the business of American Justice Solutions and Victim Services, Inc. Jonsson is therefore a “related person” under the CFPA. 12 US.C. § 5481(25)(Q(- (ii).
9. Atall times related to the violations alleged herein, Jonsson individually and in concert with others, formulated, directed, controlled, and participated in the acts and practices of NOG, AJS, and VSI (collectively, the Companies), including the
acts and practices set forth in this complaint.
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10. Defendants are “debt collectors” within the meaning of the FDCPA. 15 US.C. § 1692a(6).
11. At all times material to this complaint, Defendants have provided and offered a consumer financial product or service as defined by the CFPA. 12 U.S.C. §§ 5481(5), 5481(15)(A)(vi), 5481(15)(A) (vit) (I), and 5481(15)(A)(x). Accordingly, the , Defendants are “covered persons” within the meaning of the CFPA. 12 US.C. §
5481 (6).
FACTS
12, NCGwas incorporated on April 8, 2009 in order to acquire the bad check collection business of American Corrective Counseling Services Inc. (ACCS). At that time, ACCS was a defendant in a class-action lawsuit brought by and on behalf of individuals who had received letters from ACCS that deceptively threatened possible criminal prosecution if they did not pay debts associated with dishonored checks. ACCS filed for bankruptcy in January 2009 and was allowed to sell its business, including its contracts with state and local prosecutors’ offices (DAs) to administer bad check diversion programs, to NCG.
13. AJS and VSI were incorporated on May 12, 2014, in order to acquire the assets and business of NOG. AJS and VSI are wholly owned by Defendant Jonsson.
14. Historically, bad check diversion programs have been operated by debt
collectors that entered into contracts with DAs to collect dishonored checks received
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from local merchants. The diversion programs consist of three parts: (1) full restitution to the victim merchant; (2) payment of administrative and program fees; and (3) completion of a financial accountability class. While private diversion programs can be an efficient way for DAs to delegate operation of administrative support services for such programs, the companies operating the programs, such as the Companies, must comply with the law in doing so, including operating in compliance with the FDCPA. In 2006, Congress amended the FDCPA to exclude check diversion companies from the definition of “debt collector,” but only if certain specific conditions apply. Companies operating check diversion programs must ensure that they meet the conditions for FDCPA exemption or, if they do not, must comply with the FDCPA in all respects.
15. The instant matter arises because Defendants, in administering diversion programs, engaged in deceptive conduct by sending notices and letters to consumers on DA letterheads and by creating the false impression that consumers may be prosecuted for writing bad checks unless they: enroll in the diversion program; pay the debts and administrative fees in question; and enroll in a financial education class, for which Defendants charge an additional fee (typically $130 to $190). The manner in which Defendants administer the diversion programs does not meet the FDCPA’s statutory requirements for the check diversion programs exemption. Thus,
Defendants are debt collectors under the FDCPA and must comply with all of the
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FDCPA’s provisions. As set forth herein, Defendants are in widespread violation of : the FDCPA and CFPA.
A. Background
16. Since at least April 2009, when NCG acquired the assets and took over the business operations of ACCS, until June 2014, when AJS and VSI purchased NOG’s assets and took over its operations, NCG was one of the largest providers of pre-charge bad check diversion programs in the United States. AJS and VSI have replaced NOG’s position as one of the largest pre-charge bad check diversion programs and have continued those operations from June 2014 to the present.
17. Defendants have marketed and promoted their services to DAs and to merchants and have provided the DAs with standard diversion program contracts that include screening criteria, in some cases modified or amended by the DA.
18. When a merchant who participates in one of the Companies’ diversion programs receives a check that is subsequently dishonored, the merchant can file a bounced check report directly with the Companies.
19. In most cases, the Companies review a merchant’s report to independently determine whether the consumer committed a bad. check violation under the applicable state penal law as set forth in the screening criteria. The Companies then decide whether the consumer is eligible to participate in the diversion
program.
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20. In determining whether a consumer is eligible to participate in the diversion program, the Companies do not consult the DA, the DA’s office, or any criminal background databases.
21. In order to successfully complete the diversion program, consumers must pay the Companies the amount of the alleged bad check (which amount is ultimately sent by the Companies to the complaining merchant) and an administration fee.
22, In addition, the Companies require consumers to enroll in, pay an additional fee for, and complete a financial accountability class before the company will certify that the consumer has successfully completed the diversion program. The fee for the class ranges from $130 to $190 depending on the jurisdiction in which the class is held.
23. The entire additional fee consumers pay for the financial accountability class is retained by the Companies.
24, If an alleged bad check writer does not successfully complete the diversion program, the Companies decide whether the file should be forwarded to the DA’s office for possible criminal prosecution, based on prosecution criteria that are generally stricter than the screening criteria.
25. Onlya small percentage of the files that originally meet the screening
criteria for the diversion program are forwarded to the DA’s office to be reviewed for
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criminal prosecution. In the jurisdictions where Defendants operate diversion programs, few, if any, of the files that meet the prosecution criteria result in the filing of a criminal charge.
B. The Initial Collection Letters
26. Since at least July 21, 2011, Defendants have sent out initial collection letters on DA letterhead - often bearing a facsimile of the DA’s signature — to consumers that Defendants determined met the diversion program intake criteria. An example of NCG’s initial collection letter is attached hereto as Exhibit 1. Since June 2014 AJS and VSI have continued to send such letters, which are essentially unchanged from NCG’s letters.
27. The collection letters on DA letterhead do not disclose the identity of one of the Companies as the sender of the letters, but merely include a brief reference, in small type in a box at the bottom of the page, to “a third party administrator.”
28. In addition, statements in the letters refer to the DA, “this office,” or “my office,” and do not indicate that the letters are from one of the Companies, and do not disclose that a DA has not reviewed the bad check allegations against that consumer. Specifically, the letters state:
a. “My office has established a Bad Check Restitution Program.”
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b. “If you choose to participate in the Bad Check Restitution Program, and if you successfully complete the program’s two steps outlined above, my office will consider this matter resolved.”
29. The initial collection letters contain the heading in bold capital letters, “OFFICIAL NOTICE - IMMEDIATE ATTENTION REQUIRED.” They also state that the consumer has been accused of violating a penal statute and can enter a “pre-charge program” to avoid “the possibility of further action against the accused by the District Attorney.” Specifically, the initial collection letters state:
a. “You have been accused of violating” a specific state statute;
b. A “conviction under this statute is punishable by... imprisonment and/or a fine;”
c. “The Bad Check Restitution Program ... is a pre-charge program designed to allow people accused of having violated the above referenced statute to avoid the possibility of further action against the accused by the District Attorney's office.”
30. Less than one percent of the consumers that receive the initial collection letter meet the criteria for criminal prosecution or are ultimately referred to the DA’s office to be reviewed for possible criminal prosecution.
31. Defendants sent these letters to consumers knowing that the possibility
of actual prosecution is extremely remote.
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32. The initial collection letter does not disclose that one of the Companies is attempting to collect a debt and that any information obtained will be used for that purpose, as required by section 807(11) of the FDCPA. 15 US.C. § 1692e(11).
33. Neither the initial collection letter, nor any communication sent within five days of the initial collection letter, provide the statements regarding a consumer’s right to validate the debt required by section 809 of the FDCPA. 15 U.S.C. § 1629g,
C. Second Collection Letters
34. Since at least July 21, 2011, Defendants have sent a second warning letter on DA letterhead to consumers who either did not reply to the initial letter or did not successfully complete the diversion program. An example of NOG’s second waming letter is attached hereto as Exhibit 2. Since June 2014 AJS and VSI have continued to send such letters, essentially unchanged from NOG’s letters. The second warming letters make the following statements:
a. “Our records indicate that you have failed to respond or fully comply with the [DA’s] Official Notice.”
35. “Successful completion of the program requires that you comply with all of the Bad Check Restitution Program requirements including full restitution, all fees and attendance of the Financial Accountability class.”
36. The Companies send these second warning letters before the consumer’s
file has been forwarded to the DA to be considered for criminal prosecution, and
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indeed, it sends these letters at a time when it has not been determined whether the consumer’s file will be forwarded to the DA to be considered for criminal prosecution.
37. The second warning letters on DA letterhead do not disclose the identity of one of the Companies as the sender of the letters.
38. Defendants are aware that less than one percent of those consumers to whom they mail the second warning letters will ultimately be referred to the DA’s office for possible criminal prosecution.
D. Subsequent Letters and Second Screening
39. Since at least July 21, 2011, Defendants have sent subsequent warning letters on DA letterhead to consumers who either did not reply to the second warning letters or did not successfully complete the diversion program. In a final attempt to collect the consumer’s debt and have the consumer enroll in the diversion program, Defendants sent letters on DA letterhead containing the heading in bold capital letters, “CASE FORWARDED FOR POTENTIAL CRIMINAL PROSECUTION.” An example of NOG’s final warning letter is attached hereto as Exhibit 3. Since June 2014 AJS and VSI have continued to send such letters, essentially unchanged from .
NGG’s letters. The final warning letters make the following statements:
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a. “Your case has been reviewed and forwarded to the [DA] for consideration of prosecution ... due to your failure to complete the requirements of the Bad Check Restitution Program.”
b. “Your immediate response may be able to cease this action.”
c. “Successful completion of the program requires that you comply with all of the Bad Check Restitution Program requirements including full restitution, all fees and attendance of the Financial Accountability class.”
40. The final warning letters on DA letterhead do not disclose the identity of one of the Companies as the sender of the letters.
41. Defendants are aware that less than one percent of those consumers to whom it mails the final warning letters will ultimately be referred to the DA’s office for possible criminal prosecution and that few, if any, are ever prosecuted.
E. Defendant Jonsson’s Role
42, Jonsson is ultimately responsible for the operation of the Companies and the actions taken by their employees in the administration of the diversion programs. Jonsson reviewed and approved, or allowed the continued use of, the Companies’ collection letters. He oversees all aspects of the diversion program, including the intake process and the determination of which consumers are referred
to the DAs for possible criminal prosecution.
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F, State and Federal Statutes Concerning Bad Check Diversion Programs ,
43. Under the penal laws of California, Florida, Minnesota, Nevada, Oregon, and Illinois, states where the Companies have contracts to administer diversion programs, DAs may contract with a private entity to administer their diversion programs; however, these state laws explicitly state that the DAs must use screening criteria, which are also set forth in those laws, to decide which consumers are appropriate for enrollment in diversion programs.
44. In administering diversion programs, the Companies have determined which specific consumers are appropriate for enrollment, thereby exercising independent prosecutorial discretion.
45. In administering diversion programs, the Companies have determined which specific consumers are appropriate for enrollment without using the screening criteria mandated by state law, thereby administering the diversion programs contrary to the penal laws in the states where they operate.
46, Section 818 of the FDCPA, 15 U.S.C. § 1692p, provides that private entities operating pretrial bad check diversion programs are not “debt collectors” under the FDCPA if the entity, in the course of performing its duties, among other things, complies with state penal laws, does not exercise independent prosecutorial
discretion, contacts consumers only after a DA has determined that the consumer is
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appropriate for the diversion program, and includes certain clear and conspicuous statements in its initial written communications with consumers.
47, In administering diversion programs, Defendants failed to comply with state penal laws, exercised independent prosecutorial discretion, contacted consumers before a DA had determined that the consumer was appropriate for the diversion program, and failed to include in their initial written communications with consumers the clear and conspicuous statements required by the FDCPA’s statutory exception for certain bad. check diversion programs operated by private entities. Therefore, Defendants fail to meet the statutory exception criteria of section 818 of the FDCPA, 15 U.S.C. § 1692p, and each Defendant is a “debt collector” under the FDCPA and is bound by its provisions.
VIOLATIONS OF THE
CONSUMER FINANCIAL PROTECTION ACT AND FAIR DEBT COLLECTION PRACTICES ACT
48, Sections 1031 and 1036(a)(1)(B) of the CFPA, 12 U.S.C. §§ 5531 and 5536(a)(1)(B), prohibit covered persons from engaging “in any unfair, deceptive, or abusive act or practice.”
49, Section 807 of the FDCPA, 15 U.S.C. § 1692e, prohibits debt collectors from using any false, deceptive, or misleading representation or means in connection with the collection of any debt. Section 807(3) of the FDCPA, 15 USS.C. § 1692e(3),
specifically prohibits the false representation or implication that any individual is an
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attomey or that the communication is from an attorney. Section 807(4) of the FDCPA, 15 US.C. § 1692e(4), specifically prohibits the representation or implication that nonpayment of any debt will result in the arrest or imprisonment of any person unless such action is lawful and the debt collector or creditor intends to take such action. Section 807(5) of the FDCPA, 15 U'S.C. § 1692e(5), specifically prohibits the threat to take any action that cannot legally be taken or that is not intended to be taken. Section 807(9) of the FDCPA, 15 U.S.C. § 1692e(9), prohibits the use or distribution of any written communication which simulates or is falsely represented to be a document authorized, issued, or approved by any official or agency of any State, or which creates a false impression as to its source, authorization, or approval. Section 807(10) of the FDCPA, 15 US.C § 1692e(10), prohibits using false representations or deceptive means to collect or attempt to collect any debt or to obtain information concerning a consumer. Section 807(11) of the FDCPA, 15 US.C. § 1692e(11), prohibits the failure to disclose in the initial written communication with the consumer that the debt collector is attempting to collect a debt and that any information obtained will be used for that purpose. Section 807(14) of the FDCPA, 15 US.C. § 1692e(14), prohibits using any business, company, or organization name other than the true name of the debt collector’s business, company, or organization.
Section 809{a) of the FDCPA, 15 U.S.C. § 1692g(a), requires a debt collector in its
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initial communication or within five days thereafter to send the consumer a written notice containing statements regarding a consumer’s right to validate the debt.
DEFENDANTS FALSELY REPRESENTED THAT COMMUNICATIONS WERE FROM AN ATTORNEY
50. The Bureau incorporates the allegations in paragraphs 1-47 by reference.
51. In numerous instances, in connection with collecting or attempting to collect debt from consumers, Defendants have represented to consumers, expressly or by implication, that communications sent to the consumers are from an attorney.
| 52, In fact, in numerous instances, Defendants’ communications sent to consumers are not from an attorney.
COUNT 1- VIOLATION OF THE CFPA
53. The representations set forth in Paragraph 51 are false or misleading and constitute a deceptive act or practice in violation of Section 1031(a) and 1036(a) of the CFPA, 12 US.C. §§ 5531 (a) and 5536(a).
COUNT 2- VIOLATION OF THE FDCPA
54. The acts and practices alleged in Paragraph 51 constitute violations of Sections 807, 807(3), and 807(10) of the FDCPA, 15 U.S.C. §§ 1692e, 1692e(3), and 1692e(10).
DEFENDANTS FALSELY REPRESENTED THAT NONPAYMENT OF A DEBT COULD RESULT IN AN ARREST OR IMPRISONMENT
55. The Bureau incorporates the allegations in paragraphs 1-47 by reference.
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56. In numerous instances, in connection with collecting or attempting to collect debt from consumers, Defendants have represented to consumers, directly or indirectly, expressly or by implication, that nonpayment of a debt will result in arrest or imprisonment.
57. In fact, Defendants could not lawfully cause a consumer to be arrested or imprisoned, and Defendants did not intend to take such action.
COUNT 3- VIOLATION OF THE CFPA
58. The representations set forth in paragraph 56 are false or misleading and constitute a deceptive act or practice in violation of Section 1031(a) and 1036(a) of the CFPA, 12 US.C. §§ 5531(a) and 5536(a).
COUNT 4- VIOLATION OF THE FDCPA
59. The acts and practices alleged in paragraph 56 constitute violations of Sections 807, 807(4), and 807(10) of the FDCPA, 15 US.C. §§ 1692e, 1692e(4), and 1692e(10).
DEFENDANTS FALSELY THREATENED TO TAKE ACTION THAT
CANNOT BE LEGALLY TAKEN OR IS NOT INTENDED TO BE TAKEN
60. The Bureau incorporates the allegations in paragraphs 1-47 by reference. 61. In numerous instances, in connection with the collection or attempt to collect debt from consumers, Defendants have represented, directly or indirectly,
expressly or by implication, that legal action would be taken against the consumer.
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62. In fact, in numerous instances, Defendants could not legally take legal
action and did not intend to take such action against consumers. COUNT 5- VIOLATION OF THE CFPA
63. The representations set forth in paragraph 61 are false or misleading and constitute a deceptive act or practice in violation of Section 1031(a) and 1036(a) of the CFPA, 12 U'S.C. §§ 5531 (a) and 5536(a).
COUNT 6- VIOLATION OF THE FDCPA
64. ‘The acts and practices alleged in paragraph 61 constitute violations of Sections 807, 807(5) and 807(10) of the FDCPA, 15 ULS.G §§ 16926, 1692e(5), 1692e(10).
DEFENDANTS USED OR DISTRIBUTED WRITTEN COMMUNICATIONS THAT SIMULATED OR WERE FALSELY REPRESENTED TO BE DOCUMENTS ISSUED FROM A STATE OFFICIAL OR AGENCY
65. The Bureau incorporates the allegations in paragraphs 1-47 by reference.
66. In numerous instances, in connection with collecting or attempting to collect debt from consumers, Defendants represented to consumers, directly or indirectly, expressly or by implication, that written communications distributed to consumers were issued from an official or agency of a State.
67. In fact, in numerous instances, Defendants’ written communications to
consumers were not issued from an official or agency of a State.
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COUNT 7- VIOLATION OF THE CFPA 68. The representations set forth in paragraph 66 are false or misleading and constitute a deceptive act or practice in violation of Section 1031(a) and 1036(a) of the CFPA, 12 U.S.C. §§ 5531(a) and 5536(a).
COUNT 8- VIOLATION OF THE FDCPA 69. The acts and practices alleged in paragraph 66 constitute violations of Sections 807, 807(9), and 807(10) of the FDCPA, 15 U.S.C. §§ 1692e, 1692e(9), and
1692e(10).
DEFENDANTS HAVE FAILED TO DISCLOSE THAT NCG, AJS, OR VSI
ARE DEBT COLLECTORS ATTEMPTING TO COLLECT A DEBT AND THE INFORMATION OBTAINED WILL BE USED FOR THAT PURPOSE
70. The Bureau incorporates the allegations in paragraphs 1-47 by reference.
71. In numerous instances, in connection with collecting or attempting to collect debt from consumers, Defendants have failed to disclose in the initial written communication with the consumer that Defendants are debt collectors attempting to collect a debt and that any information obtained will be used for that purpose, and have failed to disclose in subsequent communications that the communication is from a debt collector.
COUNT 9- VIOLATION OF THE FDCPA
72. The acts and practices alleged in paragraph 71 constitute violations of
Sections 807(11) of the FDCPA, 15 USS.C. § 1692e(11).
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DEFENDANTS FALSELY USED THE NAME OF AN ORGANIZATION OTHER THAN ITS TRUE NAME
73. ‘The Bureau incorporates the allegations in paragraphs 1-47 by reference.
74, In numerous instances, in connection with collecting or attempting to collect debt from consumers, Defendants used a business, company, or organization name other than its true name.
75. In truth and in fact, in numerous instances, Defendants used the names of the District or State’s Attorney in connection with collecting or attempting to collect debt from consumers.
COUNT 10- VIOLATION OF THE FDCPA
76. ‘The acts and practices alleged in Paragraph 74 constitute a violation of Section 807(14) of the FDCPA, 15 U.S.C. § 1692e(14).
DEFENDANTS’ COMMUNICATIONS OMITTED WRITTEN NOTICE
CONTAINING STATEMENTS REGARDING A CONSUMER’S RIGHT TO VALIDATE THE DEBT
77. ‘The Bureau incorporates the allegations in paragraphs 1-47 by reference. 78. In numerous instances, in connection with collecting or attempting to collect debt from consumers, Defendants have failed to provide consumers in the
initial communication or five days thereafter, proper notice under the FDCPA,
including:
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a. Unless the consumer, within thirty days after receipt of the notice, disputes the validity of the debt, or any portion thereof, the debt will be assumed to be valid by the debt collector; and
b. If the consumer notifies the debt collector in writing within the thirtyday period that the debt, or any portion thereof, is disputed, the debt collector will obtain verification of the debt or a copy of a judgment against the consumer and a copy of such verification or judgment will be mailed to the consumer by the debt collector.
COUNT 11- VIOLATION OF THE FDCPA 79. The acts and practices alleged in paragraph 78 constitute violations of Section 809(a), of the FDCPA, 15 U.S.C. § 1692g(a). DEFENDANTS MISLED CONSUMERS INTO ENTERING INTO A
DIVERSION PROGRAM THAT REQUIRED THEM TO PAY FOR AND COMPLETE A FINANCIAL ACCOUNTABILITY CLASS
80. ‘The Bureau incorporates the allegations in paragraphs 1-47 by reference.
81. In numerous instances, Defendants have represented to consumers, directly or indirectly, expressly or by implication, that the consumers had to enroll in and pay for a financial accountability class as part of the diversion program in order to avoid criminal prosecution.
82. In truth and in fact, in numerous instances, consumers did not have to
enroll in and pay for a financial accountability class to avoid criminal prosecution.
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COUNT 12- VIOLATION OF THE CFPA
83. The representations set forth in paragraph 81 are false or misleading and constitute a deceptive act or practice in violation of Section 1031 (a) and 1036(a) of the CEPA, 12 US.C. §§ 5531(a) and 5536(a).
CONSUMER INJURY
84. Consumers have suffered or are likely to suffer substantial injury as a result of Defendants’ violations of the FDCPA and CFPA. In addition, Defendants have been unjustly enriched as a result of their unlawful acts or practices.
THIS COURT’S POWER TO GRANT RELIEF
85. "The CFPA empowers this Court to grant any appropriate legal or equitable relief including, without limitation, permanent or temporary injunction, rescission or reformation of contracts, the refund of moneys paid, restitution, disgorgement or compensation for unjust enrichment, monetary relief, and civil money penalties, to prevent and remedy any violation of any provision of law enforced by the Bureau. 12 U.S.C. § 5565,
DEMAND FOR RELIEF
The Bureau requests that the Court award:
A. Apermanent injunction to prevent and restrain future violations;
B. Disgorgement of money, in an amount to be determined at trial;
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C. Restitution of an amount to be determined at trial to compensate consumers;
D. Civil money penalties;
E. Recovery of costs in connection with prosecuting the instant action; and
F, Any other legal or equitable relief deemed appropriate.
Dated: March 30, 2015 Respectfully submitted, ANTHONY ALEXIS
Etnforcement Director
Cara Petersen Aasting Deputy Enforcement Director
Sarah J. Auchterlonie Assistant Deputy Enforcement Director
/s/ Zol D. Rainey
Zol D, Rainey, Bar No. 803105 Sentor Litigation Counsel
James Meade, Bar No. 803044 Enforcement Attorney
Consumer Financial Protection Bureau 1700 G Street NW Washington, DC 20552 Telephone: (202) 435-9483 Facsimile: (202) 435-7722 Email: zol [email protected]
For the Consumer Financial Protection Bureau
Order ()
PDF of this document (17 pages)
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Case 1:15-cv-00899-RDB Document 6 Filed 03/30/15 Page 1 of 17 IN THE UNITED STATES DISTRICT COURT DISTRICT OF MARYLAND CONSUMER FINANCIAL PROTECTION BUREAU, 1700 G Street NW Washington, DC 20552 --..JFIL£0 ----fNTEfiD ---JoLOOOEO ---.RfCEMD MAR 3 1 2015 AT BAL T1M0RE CL&~~ U.S. DISTRICT COURT BY RICT OF MARYLAND DEPUTY Plaintiff, ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) CIVIL ACTION NO.
v.
NATIONAL CORRECTIVE GROUP, INC., a Delaware corporation , 910 Calle Negocio, San Clemente, CA 92673 AMERICAN JUSTICE SOLUTIONS, INC., a Delaware corporation, also d/b/a CorrectiveSolutions, 910 Calle Negocio, San Clemente, CA 92673 VICTIM SERVICES, INC.
a Delaware corporation, 910 Calle Negocio, San Clemente, CA 92673 .
and MATS JONSSON, individually and as an officer of National Corrective Group, Inc., and a principal and officer of American .Justice Solutions, Inc., and Victim Services, Inc., 910 Calle Negocio, San Clemente, CA 92673 Defendants.
Stipulated Final Judgment and Consent Order INTRODUCTION Plaintiff, the Consumer Financial Protection Bureau (the "Bureau"), has filed its Complaint for a permanent injunction and other relief in this matter (the "Action"). The Bu,reau brought this Action against Defendants National Corrective Grotlp, Inc. (NCG}; Case 1:15-cv-00899-RDB Document 7 Filed 03/31/15 Page 1 of 17
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Case 1:15-cv-00899-RDB Document 6 Filed 03/30/15 Page 2 of 17 American Justice Solutions, Inc .. , doing business as CorrectiveSolutions (AJS); Victim Services, Inc., (VSI); and Mats Jonsson (Jonsson) to enforce provisions of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq. ("FDCPA") and the Consumer Financial Protection Act, 12 U.S.C. § 5481 et seq. ("CFPA"). NCG, AJS, VSI, and Jonsson waived service of the Summons and Complaint. The Bureau, NCG, A.JS, VSI, and ,Jonsson stipulate to entry of this Order to resolve all matters in dispute in this action between them.
The parties having requested the Court to enter this Order, it is therefore ORDERED, ADJUDGED, and DECREED as follows:
FINDINGS 1.
This Court has subject-matter jurisdiction over the Bureau's Claims because they are brought under Federal consumer financial law, 12 U.S. C. § 5565(a)(1), present a federal question, 28 U.S.C. § 1331, and are brought by an agency of the United States, 28 U.S.C. § 1345.
2.
Venue is proper in this district because Defendants are located in and do business in this district, 28 U.S.C. §§ 1391(b) and (c), and 12 u:s.C. § 5564(f). 3.
The Complaint states claims upon which relief may be granted under sections 1031(a) and 1036(a)(1) of the CFPA, 12 U.S.C. §§ 5531(a) and5536(a)(1), and under sections 807 and 809 of the FDCPA, 15 U.S.C. §§ 1692e and 1692g. The relief provided in this Order is appropriate and available pursuant to sections 1054 and 1055 of the CFPA, 12 U.S. C.§§ 5564 and 5565, and section 814 of the FDCPA, 15 U.S.C. § 16921.
4. · The Bureau and Defendants stipulate and agree to entry of this Order, without trial or final adjudication of any issue of fact or law, and without any admission ofliability or wrongdoing, to settle and resolve all matters in dispute arising from the conduct of the Defendants alleged in the Complaint to the date of entry of this Order. 5· All parties waive all rights to appeal or othen.,ise challenge or contest the validity of this Order. Defendants further waive and release any claim they may have against the Bureau, and its employees, representatives, or agents. 6.
Defendants waive any claim that they may have under the Equal Access to Justice Act, 28 U.S.C. § 2412, as amended by Pub L. 104-121, 100 Stat. 847, 863-64 Case 1:15-cv-00899-RDB Document 7 Filed 03/31/15 Page 2 of 17
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Case 1:15-cv-00899-RDB Document 6 Filed 03/30/15 Page 3 of 17 (1996), and further waive any right to attorneys' fees that may arise under said provision oflavv.
DEFINITIONS 7.
For purposes ofthis Order, the follm-ving definitions shall apply: a.
"affected consumer" means any consumer who paid financial accquntability class fees, directly or indirectly, to Defendants during the relevant time period in relation to a.bad check violatioi1. b.
"bad check violation" means a Violation of the app1i.cable State criminal law relating to the '"Titing of dishonored checks; c.
"check" means a draft, payable in United States dollars, on demand and dravm on or payable through or at an office of a depository institution, whether or not negotiable, that is handled for forward collection or return, including a substitute check and a traveler's check; but not including a noncash item;
d.
"collection" means any procedure or action pursued by Defendants to obtain payments related to a debt and/or restitution; e.
"communication" means the conveying of information regarding a debt and/or restitution to any person through any medium; f.
"consumer" means any natural person obligated or allegedly· obligated to pay any debt and/ or restitution; g.
''Defendants" means National Corrective Group, Inc., doing business as CorrectiveSolutions; American Justice Solutions, Inc., doing business as CorrectiveSolutions; Victim Services, Inc.; Mats Jonsson, and their successors and assigns;
h.
"District Attorney" or "DA" means a State or district attorney-the chief elected or appointed prosecuting attorney in a district, county (as defined in section 2 of title 1, United States Code), municipality, or comparable jurisdiction, including State attorneys general who act as chief elected or appointed prosecuting attorneys in a district, county (as so defined), municipality or comparable jurisdiction, who may be referred to by a variety of titles such as district attorneys, prosecuting attorneys, commonwealth's attorneys, solicitors, county attorneys, and state's attorneys, and who are responsible for the Case 1:15-cv-00899-RDB Document 7 Filed 03/31/15 Page 3 of 17
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Case 1:15-cv-00899-RDB Document 6 Filed 03/30/15 Page 4 of 17 prosecution of State crimes and violations. of jurisdiction-specific local ordinances;
i.
"debt and/or restitution" means any obligation or alleged obligation of a consumer to pay money arising out of a transaction in which the money, property, insuranee, or services which are the subject of the transaction are primarily for personal, family, or household purposes, including the amount of any fees associated with a pre-trial bad check diversion program; j.
"pre-trial bad check diversion program" means any pre-charge pretrial bad check diversion programs for alleged bad check offenders operated by Defendants.
1.
"Enforcement Director" shall mean the Assistant Director of the Office of Enforcement for the Consumer Financial Protection Bureau, or his/her delegee.
m.
"effective date" means the date on vvhich the Order is entered. n.
"person" means an individual, pmtnership, company, corporation, association (incorpGrated or unincorporated), trust, estate; cooperative organization, or other entity.
o.
"related consumer action" means a private action by or on behalf of one or more consumers or an enforcement action by another governmental agency brought against any of the Defendants based on substantially the same facts as alleged in the Complaint filed in this Action. p.
"relevant time period" means the period from July 21, 2011 through March 15, 2015.
ORDER Compliance with all applicable laws IT IS ORDERED that:
8.
Defendants, and all of their officers, and employees who have actual notice of this Order, whether acting directly or indirectly, are hereby permanently restrained and enjoined from violating the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq. ("FDCPA") and the Consumer Financial Protection Act, 12 U.S.C. § 5481 et seq. ("CFPA") and, ·without limiting the scope of the foregoing: Case 1:15-cv-00899-RDB Document 7 Filed 03/31/15 Page 4 of 17
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Case 1:15-cv-00899-RDB Document 6 Filed 03/30/15 Page 5 of 17 a.
Defendants shall not engage in any unfair, deceptive, or abusive acts or practices in connection \·dth the collection of any debt and/or restitution; b.
Defendants shall not engage in any unfair, deceptive, or abusive acts or practices in connection v.i.th the operation of a pre-trial bad check diversion program, financial accountability classes, or any other class associated with the co11ection of any debt and/ or restitution; c.
Defendants shall not represent to consumers, directly or indirectly, expressly or by implication, that they are a District Attorney, including through the use of a letterhead or facsimile signature of a District Attorney, through the Defendants' manner of answering telephone calls from consumers, or othenvise; provided, however, that Defendants may reference the District Attorney in communications with consumers if they clearly and conspicuously state that Defendants are a private company administering the pre-trial bad check diversion program on behalf of the Dil;;trict Attorney; d.
Defendants shall clearly and conspicuously inform consumers in all communications that the communication is from the applicable Defendant; e.
Defendants shall not operate or administer a pre-trial bad check diversion program, contact consumers about a pre-trial bad check diversion program, or represent to a consumer, directly or indirectly, expressly or by implication, that they are eligible for a pre-trial bad check diversion program, unless Defendants have receivedfrom the District Attorney or an employee of the district attorney authorized to make such a determination a ·written verification that:
i.
the District Attorney or an employee of the district attorney authorized to make such a determination has performed a review of a bad check violation and determined that probable cause of a bad check violation under State penal law exists with regard to that consumer; ii.
the District Attorney or an employee ofthe district attorney authorized to make such a determination has determined that contact with the alleged offender for purposes of participation in the diversion program is appropriate;
Case 1:15-cv-00899-RDB Document 7 Filed 03/31/15 Page 5 of 17
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Case 1:15-cv-00899-RDB Document 6 Filed 03/30/15 Page 6 of 17 m.
the District Attorney or an employee of the district attorney authorized to make such a determination has determined that the alleged offender has failed to pay the bad check after demand for payment, pursuant to State law, was made for payment of the check amount; and iv.
the District Attorney has met all applicable state law prerequisites for including a bad check violation in the diversion program, including conducting criminal background checks, where required by state law;
f.
Defendants shall not operate or administer a pre-trial bad check diversion program unless they are operating under the direction, supervision, and control of a District Attorney;
g.
Defendants shall not represent to consumers, directly or indirectly, expressly or by implication, that consumers may be subject to legal action, including criminal prosecution except that Defendants may accurately restate or cite applicable state penal had check laws;
h.
Defendants shall not represent to consumers, directly or indirectly, expressly or by implication, that nonpayment of a debt ·will result in consumers' arrest or imprisonment;
i.
Defendants shall not, directly or indirectly, expressly or by implication, refer to legal action, criminal charges, criminal prosecution, fines, arrest, or imprisonment, in headers, titles, bold font, or all-capitalletters in any communication ·with a consumer;
J.
Defendants shall include as pa1t of an initial communication vvith any consumer the clear and conspicuous statement: The District Attorney's Office has reviewed a summary of the allegations and has determined that you are eligible for the Program. The DistrictAttorney's Office has not decided whether you should be charged with a crime. That decision will be made by that Office at a future date and may depend on many factors. Those factors could include: (1) the amount of the check; (2) whether there is evidence and the weight of the evidence that you knowingly wrote a bad check; (3) your criminal record; and (4) the individual facts and circumstances of your case. Many cases are never prosecuted;
Case 1:15-cv-00899-RDB Document 7 Filed 03/31/15 Page 6 of 17
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Case 1:15-cv-00899-RDB Document 6 Filed 03/30/15 Page 7 of 17 k.
In any communication to consumers about a diversion program, Defendants shall clearly and conspicuously disclose: the original amount of the bad check and each fee, including administrative, returned item, and program fees;
l.
In any communication to consumers about a diversion program, Defendants shall clearly and conspicuously inform consumers that participation in the diversion program is voluntary; and m.
Defendants shaH include as part of an initial communication with any consumer a clear and conspicuous statement as required by section 818(a)(2)(C)(v) of the FDCPA, 15 U.S.C. § 1692p(a)(2)(C)(v), that: L the alleged offender may dispute the validity of any bad check violation;
ii.
where the alleged offender knows, or has reasonable cause to believe, that the alleged bad check violation is the result of theft or forgery of the check, identity theft, or other fraud that ~s not the result of the conduct of the alleged offender, the alleged offender may file a crime report vvith the appropriate law enforcement agency; and iii.
if the alJeged offender notifies the private entity or the district attorney in writing, not later than 30 days after being contacted for the first time pursuant to 15 U.S.C. § 1692p(a)(2)(C)(iv), that there is a dispute pursuant to 15 U.S. C.§ 1692p(a), before further restitution efforts are pursued, the district attorney or an employee of the district attorney authorized to make such a determination makes a determination that there is probable cause to believe that a crime has been committed. 9.
Defendants shall not, if acting as debt colJectors under section 803(6) of the FDCPA, 15 U.S.C. § 1692a(6):
a. fail to disclose in the initial \Vritten communication \·vith the consumer that Defendants are debt colJectors attempting to collect a debt and that any information obtained will be used for that purpose, or fail to disclose in subsequent communications that the communication is from a debt collector; b. fail to provide consumers in the initial communication or five days thereafter, proper notice under the FDCPA, including: Case 1:15-cv-00899-RDB Document 7 Filed 03/31/15 Page 7 of 17
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Case 1:15-cv-00899-RDB Document 6 Filed 03/30/15 Page 8 of 17 1. that unless the consumer, within thirty days after receipt of the notice, disputes the validity of the debt, or any portion thereof, the debt will be assumed to be valid by the debt collector; and u. that if the consumer notifies the debt collector in v .. Titing vvithin the thirty-day period that the debt, or. any portion thereof, is disputed, the debt collector vvill obtain verification of the debt or a copy of a judgment against the consumer and a copy of such verification or judgment -will be mailed to the consumer by the debt collector.
Civil Money Penalties IT IS FURTHER ORDERED that:
10.
Under section 1055(c) of the CFPA, 12U.S.C. § ss6s(c}, by reason of the violations of lmv alleged in the Complaint, and taking into account the factors set forth in 12 U.S.C. § ss6s(c)(3), Defendants shall pay a civil money penalty of $so,ooo to the Bureau, as directed by the Bureau and as set forth herein. 11.
Within 10 days of the effective date, Defendants shall pay the civil money penalty in the form of a wire transfer to the Bureau or to such agent as the Bureau may direct, and in accordance V\ith wiring instructions to be provided by counsel for the Bureau.
12.
The civil money penalty paid under this Order '"'ill be deposited in the Civil Penalty Fund of the Bureau in accordance V\ith section1017( d) of the CFPA, 12 U .S.C; § 5497(d).
13.
Defendants shall treat the civil money penalty paid under this Order as a penalty paid to the government for a1l purposes. Regardless of how the Bureau ultimately uses those funds, Defendants shall not: a.
claim, assert, or apply for a tax deduction, tax credit, or any other · tax benefit for any civil money penalty paid under this Order; or b.
seek or accept, directly or indirectly, reimbursement or indemnification from any source, hi eluding but not limited to payment made under any insurance policy, vvith regard to any civil money penalty paid under this Order.
14.
To preserve the deterrent effect of the civil money penalty, in any related consumer action, Defendants shall not argue that Defendants are entitled to, nor shall Case 1:15-cv-00899-RDB Document 7 Filed 03/31/15 Page 8 of 17
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Case 1:15-cv-00899-RDB Document 6 Filed 03/30/15 Page 9 of 17 Defendants benefit by, any offset or reduction of any monetary remedies imposed in the related consumer action, because of the civil money penalty paid in this action ("penalty offset"). If the court in any related consumer action grants such a penalty offset, Defendants shall, within 30 days after entry of a final order granting the penalty offset, notify the Bureau, and pay the amount of the penalty offset to the U.S. Treasury. Such a payment shall not be deemed an additional civil money penalty and shall not be deemed to change the amount of the civil money penalty imposed in this action. Additional Monetary Provisions IT IS FURTHER ORDERED that:
15.
In the event of any default on Defendants' obligations to make payment under this Consent Order, interest, computed under 28 U.S. C.§ 1961, as amended, vvill accrue on any outstanding amounts not paid from the date of default to the date of payment, and will immediately become due and payable. 16.
Defendants must relinquish all dominion, control, and title to the funds paid to the fullest extent permitted by law and no part of the funds may be returned to Defendants.
17.
Under 31 U.S.C. § 7701, Defendants, unless they already have done so, must furnish to the Bureau their taxpayer identification numbers, which may be used for purposes of collecting and reporting on any delinquent amount arising out of this Consent Order.
18.
Within 30 days of the entry of a final judgment, consent order, or settlement in a Related Consumer Action, any Defendant subject or party to such judgment, order, or settlement must notify the Enforcement Director of the final judgment, consent order, or settlement in ·writing. That notification must indicate the amount of redress, if any, that the Defendant paid or is required to pay to consumers and describe the consumers or classes of consumers to ·vvhom that redress has been or will be paid.
19.
Under section 604(a)(I) of the Fair Credit RepmtingAct, 15 U.S.C.§ 1681 b(a)( 1), any consumer reporting agency may furnish a consumer report concerning any Defendant to the Bureau, which may be used for purposes of collecting and reporting on any delinquent amount arising out of this Consent Order. Case 1:15-cv-00899-RDB Document 7 Filed 03/31/15 Page 9 of 17
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Case 1:15-cv-00899-RDB Document 6 Filed 03/30/15 Page 10 of 17 Compliance Plan IT IS FURTHER ORDERED that:
20.
Within 30 days of the effective date, Defendants shall submit to the Enforcement Director for review and determination of non-objection a comprehensive compliance plan designed to ensure that their operation of pre-trial bad check diversion programs complies with all applicable Federal consumer financial laws and the terms of this Order ("Compliance Plan"). The Compliance Plan shall include, at a minimum, detailed steps for addressing each action required by this Order, and specific timeframes and deadlines for implementation of those actions. 21.
The Enforcement Director shall have the discretion to make a determination of non-objection to the Compliance Plan or directthe Defendants to revise it. In the event that the Enforcement Director directs the Defendants to revise the Compliance Plan, the Defendants shall make the revisions and resubmit the Compliance Plan to the Enforcement Director within 15 days.
22.
Upon notification that the Enforcement Director has made a determination of non-objection to the Compliance Plan, Defendants shall implement and adhere to the steps, recommendations, deadlines, andtimeframes set forth in the Compliance Plan.
Reporting Requirements IT IS FURTHER ORDERED that:
23.
Defendants shall notify the Bureau of any change that may affect compliance obligations arising under this Order, including but not limited to, a dissolution, assignment, sale, merger, or other action that would result in the emergence of a successor company; the creation or dissolution of a subsidiary, parent, or affiliate that engages in any acts or practices subject to this Order; the filing of any bankruptcy or insolvency proceeding by or against Defendants; or a change in the name or address of Defendants .
24.
Within go days of the effective date, and again one year after the effective date, Defendants shall submitto the Enforcement Director an accurate written compliance progress report which has been approved by Defendants' officers, which, at a minimum, describes in detail the manner and form in which Defendants have complied ''"ith this Order.
Case 1:15-cv-00899-RDB Document 7 Filed 03/31/15 Page 10 of 17
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Case 1:15-cv-00899-RDB Document 6 Filed 03/30/15 Page 11 of 17 25.
After the one-year period, Defendants shall submit to the Enforcement Director additional Compliance Reports \Vithiri 14 days of receiving a wTitten request from the Bureau.
Cooperation with the Bureau 26.
Defendants must cooperate fully to help the Bureau determine the identity and location of, and the amount of injury sustained by, each affected consumer. Each Defendant must provide such information in its or its agents' possession or control within 14 days of receiving a written request from the .Bureau. Order Distribution and Acknowledgment IT IS FURTHER ORDERED that, 27.
·within seven days of the effective date, Defendants shall submit to the Enforcement Director an acknowledgment of receipt of this Order, sworn under penalty of pe1jury.
28.
Within 30 days of the effective date, Defendants shall deliver a copy of this Order to each of their board members and executive officers, as well as to any managers, employees, or other agents and representatives who have responsibilities related to the subject matter of the Order.
29.
For five years from the effective date, Defendants shall deliver a copy of this Order to any business entity resulting from any change in structure, as set forth in Paragraph 22, and to any future board members and executive officers, as well as to any managers, employees, or other agents and representatives who will have responsibilities related to the subject matter of the Order before they assume their responsibilities. 30.
Defendants shall secure a signed and dated statement acknowledging receipt of a copy of this Order, vvith any electronic signatures complying with the requirements of theE-Sign Act, 15 U.S.C. § 7001 et seq., \vithin 30 days of delivery, from all persons receiving a copy of this Order under this Section. Recordkeeping IT IS FURTHER ORDERED that:
31.
Defendants shall create, for at least five years from the effective date, and then retain, for at least five years, and make available to the Bureau upon request, the following business records:
Case 1:15-cv-00899-RDB Document 7 Filed 03/31/15 Page 11 of 17
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Case 1:15-cv-00899-RDB Document 6 Filed 03/30/15 Page 12 of 17 · a.
all documents and records necessary to demonstrate full compliance ·with each provision of this Order; and b.
copies of all template letters to consumers; call scripts; training materials; websites; and other template communications \Vith consumers; and including any such materials used by a third party on behalf of Defendants as they relate to pre-trial diversion program as defined in Paragraph 7(i). Notices IT IS FURTHER ORDERED that:
32.
Unless othenvise directed in V\-Titi1:1g by the Bureau, Defendants must provide all submissions, requests, communications, or other documents relating to this Consent Order in writing, vvith the subject line, "In re National Corrective Group, File No. 2012-0403-02," and send them either:
a.
By overnight courier (not the U.S. Postal Service), as follows: Assistant Director for Enforcement Consumer Financial Protection Bureau ATTENTION: Office of Enforcement 1625 Eye Street, N.W.
Washington D.C. 20006; or b.
By first-class mail to the belO'IN address and contemporaneously by email to Enforcement_ [email protected]:
Assistant Director for Enforcement Consumer Financial Protection Bureau ATTENTION: Office of Enforcement 1700 G Street, N.W.
Washington D.C. 20552 Compliance Monitoring IT IS FURTHER ORDERED that, for the purpose ofmonitoring Defendants' compliance with this Order:
33.
Within 14 days of receipt of a written request from the Bureau, Defendants shall: submit additional compliance repmts or otherrequested information, which shall Case 1:15-cv-00899-RDB Document 7 Filed 03/31/15 Page 12 of 17
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Case 1:15-cv-00899-RDB Document 6 Filed 03/30/15 Page 13 of 17 be made under penalty of pe1:jury; appear for depositions; provide S"\,vorn testimony; or produce documents.
:34· The Bureau is also authorized to obtain discovery, without leave of comt, using any of the procedures prescribed by the Bureau's Rules of Practice for Adjudication Proceedings, 12 C.P.R. Part 1081, or the Federal Rules of Civil Procedure. 35· For purposes of this Section, the Bureau may communicate directly "'~th Defendants, unless Defendants retain counsel in connection mth such communications. 36.
Defendants shall permit Bureau representatives to interview any employee or other person affiliated "\-'.rith Defendants who has agreed to such an interview. The person intervie\ved may have counsel present.
37.
The Bureau may use all other lawful means, including posing, through its representatives, as consumers, suppliers, or other individuals or entities, to Defendants or any individual or entity affiliated with Defendant, mthout the necessity of identification or prior notice.
38.
Defendants agree to be subject to the Bureau's supervisory authority under 12 U.S.C. § 5514 for 3 years from the effective date. Consistent mth 12 C.F.R. § 1091.111, Defendants shall not petition for termination of supervision under 12 C.F.R. § 1091.113. 39.
. Nothing in this Order shall limit the Bureau's lawful use of compulsory process, under 12 C.F.R. § 1080.6 or any other applicable provision. Administrative Provisions IT IS FURTHER ORDERED that:
40.
Except for "Released Claims", as defined below, the provisions of this Order shall not bar, estop, or otherwise preventthe Bureau from taking any other action against Defendants and their successors and assigns. 41.
Calculation of time limitations shall run from the effective date and shall be based on calendar days, unless otherwise noted. 42.
This Order contains the complete agreement between the parties. No promises, representations, or warranties other than those set forth in this Order have been made by any of th~ parties. This Order supersedes all prior communications, discussions, or understandings, if any, of the parties, whether oral or in writing. 43.
Nothing in this Order shall be construed as allowing Defendants to violate any law, rule, or regulation, Case 1:15-cv-00899-RDB Document 7 Filed 03/31/15 Page 13 of 17
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Case 1:15-cv-00899-RDB Document 6 Filed 03/30/15 Page 14 of 17 Scope of Consent Order 44· The Bureau releases and discharges Defendants and their respective officers, directors, shareholders, successors, and assigns, from all potential liability for any cause of action or claim that has been or might have been asse1ted by the Bureau based on the practices alleged in the Complaint to the extent such practices or conduct are knm\rn to the Bureau prior to the effective date (collectively "Released Claims"). Notwithstanding the foregoing, the practices alleged in this Order may be utilized by the Bureau in future enforcement actions against Defendants and their affiliates, including, without limitation, to establish a pattern or practice of violations or the continuation of a pattern or practice of violations or to calculate the amount of any penalty. This release shall not preclude or affect any right of the Bureau to determine and ensure compliance vvith the terms and provisions of the Order, or to seek penalties for any violations thereof.
Retention of Jurisdiction IT IS FURTHER ORDERED that this Comt retains jurisdiction of this matter for purposes of construction, modification, and enforcement of this Order. "''T SO ORDERED this~ day of /Y\-A11-c¥ '2015.
UNITED STATES DISTRICT ,JUDGE Case 1:15-cv-00899-RDB Document 7 Filed 03/31/15 Page 14 of 17
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Case 1:15-cv-00899-RDB Document 6 Filed 03/30/15 Page 15 of 17 THE UNDERSIGNED HEREBY CONSENT TO ENTRY OF THIS ORDER On behalf ofPlaintf(f Consumer Financial Protection Bureau Anthony Alexis Director for Enfm·cement Cara Petersen Acting Deputy Directorfor Enforcement Sarah Auchterlonie Assistant Deputy Director for Enforcement Zol . Rainey, Bar No. 803105 Senior Litigation Counsel James Meade, Bar No. 803044 Enforcement Attorney / Consumer Financial Protection Bureau 1700 G Street, NW Washington, DC 20552 Telephone: (202)435-9483 Facsimile: (202) 435-7722 Email: [email protected] DATED ;11ryu f..v ~ J , 2015.
Case 1:15-cv-00899-RDB Document 7 Filed 03/31/15 Page 15 of 17
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Case 1:15-cv-00899-RDB Document 7 Filed 03/31/15 Page 16 of 17 Case 1:15-cv-00899-RDB Document6 Filed 03/30/15 Page 16 of 17 )
On behalf of Defendant National Corrective Group, Inc.
A axh 1-4 r Lo Oe .
/M ats J onsson / CEO ”
| National Corrective Group, Inc. ’
March 17, 2015
Mats JorSson
CEO”
Amé€rican Justice Solutions, Inc. a
March 17, 2015
On behalf of Defendant Victim Services, Inc.
Thomas Jonsson President
Victim Services, Inc.
March 17, 2015
On behalf of Defendant Mats Jonsson
Mats J onéson Individual
March 17, 2015
Page 42
Case 1:15-cv-00899-RDB Document? Filed 03/31/15 Page 17 of 17 Case 1:15-cv-00899-RDB Document 6 Filed 03/30/15 Page 17 of 17
On behalf af Defendant National Corrective Group, Inc.
Mats Jonsson
CEO
National Corrective Group, luce.
March 17, 2015 ‘s ;
On behalf of Defendant American Justice Solutions, Inc.
Mats Jonsson
CEO
American Justice Solutions, Inc. March 17, 2015
On behalf of Defendant Victim Services, Inc.
Thomas Joneson | President '
Victim Services, Inc.
March 17, 2015
On behalf of Defendant Mats Jonsson
Mats Jonsson Individual
March 17, 2015