FOR IMMEDIATE RELEASE:
May 15, 2003
FOR FURTHER INFORMATION CONTACT:
Genene Morris (973)504-6327
NEWARK — New Jersey is suing a Secaucus company and its principal alleging they carried out a fraudulent debt-collection scheme that involved harassing, embarrassing, intimidating and verbally abusing consumers into paying debts the defendants claimed they owed, even after consumers disputed the company's figures or said they had proof of paying off the arrears, Acting Attorney General Peter C. Harvey and New Jersey Division of Consumer Affairs Director Reni Erdos announced today.
The State's seven-count complaint, filed in Hudson County Superior Court, names debt-collection company Check Investors, Inc., which does business as National Check Control of 55 Hartz Way, Secaucus, and its principal, Barry Sussman of Fort Lee. The suit also names interrelated debt-collection companies, Check Enforcement and Jaredco, Inc., which does business as Goldman and Company. Sussman is also the president of Jaredco.
The State's suit alleges the defendants violated New Jersey's Consumer Fraud Act and Collection Statute while engaging in the practice of collecting debts owed by consumers who wrote personal checks that allegedly bounced. Sometimes, the complaint alleges, the defendants collected debt for clients, while other times they purchased the debt in bulk at a discount from third parties, such as Tele-check, and attempted to collect payments on their own.
In their attempts to collect amounts owed, the complaint alleges, the defendants called consumers and sent them dunning letters demanding payment. Often, in their communications with consumers, the defendants' representatives used profane language and/or falsely represented that they were government officials. Other times, the representatives spoke with consumers' young children, elderly parents, neighbors or others about the debt without the consumers' permission. In such conversations, the complaint alleges, the defendants harassed the third parties and referred to the consumers in question as criminals.
In many instances, Acting Attorney General Harvey and Director Erdos noted, the defendants allegedly inflated the amounts actually owed by consumers by as much as $130 and threatened them with criminal prosecution if they did not immediately pay the amount they claimed the consumers owed. When asked by consumers for an explanation for the inflated amounts, the defendants refused to provide one; yet continued to demand payment.
Furthermore, when consumers refused to pay, the complaint alleges, the defendants sent form letters to consumers under the name of an attorney threatening them with criminal prosecution. One of the letters read: "You are hereby advised that criminal charges are being recommended against you. You have issued fraudulent checks and failed to make civil restitution. Receipt of this letter shall be construed as proper service of such notice. This is your final opportunity to avoid criminal charges recommended against you. Return this form with payment in full ..."
More than 350 consumers complained about the defendants' alleged activities.
"These defendants accused consumers of engaging in fraudulent practices when, in fact, they were the ones allegedly breaking the law," Acting Attorney General Harvey said. "Regardless of whether the consumers owed the debts or not, the defendants' allegedly aggressive and shameless tactics fly in the face of basic decency and New Jersey law."
"Even if the consumer owed only $2, we allege in our complaint that the defendants often times demanded that the consumer ante up additional funds. But sometimes that wasn't enough to stop the harassing calls and dunning notices," Director Erdos said.
The complaint alleges that even after consumers paid the defendants, they did not remove the consumers from their database; did not send them a receipt confirming the payment was made and/or did not notify other parties, such as a credit reporting agency or Tele-Check, that the amount the debt had been satisfied.
The State's complaint further alleges the defendants, among other things:
spoke with third parties about consumers' debt and advised them that the consumers would be criminally charged, arrested and jailed unless they (the third party) or the consumer paid the debt immediately, even though the defendants had no intention of filing criminal charges and did not have the authority to arrest anyone;
have refused verbal and written requests for documentation verifying the purported debt;
continued to contact consumers requesting they make payment even after the defendants indicated they had proof the debt was satisfied;
and used unfair or unconscionable collection practices including, but not limited to, charging an inflated amount to satisfy the alleged obligations without the consumer agreeing to it or legal authority to do so.
The State's complaint seeks an order requiring the defendants to stop their alleged unlawful activities. The suit also seeks to have the defendants pay restitution to affected consumers and civil monetary penalties.
Deputy Attorney General Beverly A. Lapsley of the Division of Law is handling this case for the State.
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