New York Attorney General Eric Schneiderman's office has ordered two Buffalo, N.Y. debt collection agencies to shut down for deceptive practices.
An investigation determined that International Arbitration Services and Hearshe Kemp had falsified their credentials to intimidate consumers and avoid state oversight. The companies also were each fined $10,000.
International Arbitration closed late last fall after receiving a subpoena from the AG's office. Hearshe Kemp must close by March 15.
The investigations were prompted by complaints to the AG's office and the Federal Trade Commission.
The investigation involving International Arbitration found that the company had lied or exaggerated its relationship with judges and legal experts, its having locations in Toronto and Chicago, the year of its founding and its having a staff of 2,000 specialists and former judges, along with offices in 50 states. The probe showed none of that to be true.
The company actually began doing business in 2011 and had only one office, in Buffalo. Its website included fake photos of people who were identified as corporate officers. The company’s unscrupulous practices were done to intimidate consumers and to evade legal authorities, the investigation revealed.
In a separate investigation, it found that Hearshe Kemp committed similar acts, including misrepresenting its credentials on its website. The investigation found that the site contained false information, such as the company having a relationship with collection attorneys and claims that it had successfully litigated difficult debt cases. It also corresponded with consumers through letters that listed an incorrect amount of debt owed, while threatening them with lawsuits and civil and criminal prosecutions.
“These companies willfully represented their experience and practices in a deliberate effort to intimidate consumers struggling to pay their debts,” Schneiderman said in a statement. “The use of such deceptive tactics is unacceptable.”