Bureau of Collection Recovery Debt Collector Enforcement Action Minnesota

7/30/2019 Bureau of Collection Recovery Debt Collector Enforcement Action Minnesota

1/7

C 1861 K R J

S T T E O F M I N N E S O TD E P R T M E N T O F C O M M E R C E

In the Matter of the Collecfion Agency C O N S E N T O R D E RLicense of Bureau of Collection Recovery, LLC.License No. CA 40210720

To: Bureau of Collection Recovery, LLC7575 Corporate WayEden Prairie, M N 55344

1. Commissioner of Commerce Mike Rothman ("Commissioner") has advised

Bureau of Collection Recovery, LLC ("Respondent") that he is prepared to commence formal

action pursuant to Minn. Stat. 45.027 (2010), and other applicable law, against Respondent's

collection agency license. The Commissioner acknowledges that on February 1 2011, the

Respondent had 315 registered debt collectors and had four (4) collection agency locations

licensed to collect in Mirmesota. The Commissioner acknowledges that the owner o f this agency

was Blake Rice o f Waconia, Minnesota, until May 27, 2010, at which time new ownership

purchased Respondent. The actions outlined in this order primarily occurred prior to May 27,

2010. The acquiring company has initiated a rigorous compliance program to ensure the actions

identified below have been eliminated. These actions include:

a. Hired a third-party auditor to review and improve Respondent's internal

compliance program;

b. Centralized compliance and licensing controls;


2/7

CA 18610 KRJ

c. Revised written policies and procedures to develop a comprehensive

compliance "playbook" as a reference source for all compliance requirements;

d. Improved employee training regarding regulatory requirements;

e. Employed a more rigorous employee screening process as identified in

paragraph 4 herein;

f. Conducted a comprehensive review o f all employee files and performed

background checks on all licensed employees

g. Developed a comprehensive internal audit procedure; and

h. Terminated previous management team and put in place new management

team with revised required reporting structure.

i Created a more responsive consumer complaint system.

2. The Commissioner alleges that Respondent engaged in the following;

A . Failed to establish adequate procedures to follow when screening

individual collector applicants prior to submitting applications to the

Commissioner for registration. By doing so, Respondent is in violation of

Minn. Stat 332.33, subd. 8 (2010).

B. Failed to properly screen numerous individual debt collector registrations

prior to submitting their initial and /or renewal registrations to the

Commissioner. By doing so, Respondent violated Minnesota Statute

332.33 subd. 5(a) (2010).

C. Employed individuals as debt collectors who were known to or should

have been known to, have criminal backgrounds that included felonies.


3/7

CA 18610 KRJ

Said criminal backgrounds prohibited the applicants from being registered,

in violation of M inn. Stat. 45 027 subd. 7 (2010).

D. Failed to notify the Department when its registered debt collectors were

fired for reasons that were in whole or in part violations of M inn. Stat.

332.385 (2010). This included employees fired because they engaged in

the following: 3' party disclosure, vulgar language, calling and swearing

at debtors, failing background checks and other harassing behaviors in

violation of Minn. Stat. 332 385 (2010).

E. Prior to May 27, 2010, directed employees to change the dates of

scheduled payments (known as postdated payments) to a date earlier than

the date that individual debtors had agreed to without obtaining each

debtor's consent to make the change; falsified debt collector logs to cover

up the payment date changes; and then deposited the postdated payments

prior to the agreed dates at least 41 times in violation of 808 (4) o f the

FDCPA and Minn. Stat. 332 37 (12) (2010). This activity resulted in

debits to debtors' bank accounts prior to when it would have otherwise

occurred for the agreed payment date. Each month. Respondent was in

competition against competitors collecting for the same Creditors. By

receiving payments earlier. Respondent's collection totals appeared better

than they otherwise would have been. This activity gave Respondent an

unfair competitive advantage. Such acts are in violation of Minn. Stat.

45 027 Subd. 7(2010).


4/7

CA 18610 KRJ

F. Prior to May 27, 2010, changed the dates of deposit of postdated payments

in the Respondent's collection system, creating a "forward posting" which

was reflected on monthly accounting reports to creditors. This activity

made it appear as though monies were collected a month earlier than the

actual date the payments were debited to the debtors' accounts. The result

was to falsify the date monies were collected in order to enhance

Respondent's monthly collection totals for the creditor. Consequently,

Respondent's collection totals appeared better than they otherwise would

have been. This activity gave Respondent an unfair competitive

advantage in violation of M inn. Stat. 45 027 Subd. 7 (2010).

3. Respondent acknowledges that it has been advised of its rights to a hearing in this

matter, to present argument to the Commissioner and to appeal from any adverse

determination after a hearing, and Respondent hereby expressly waives those rights.

Respondent fiirther acknowledges that it has been represented by legal counsel

throughout these proceedings or hereby expressly waives that right.

3. Respondent has completed the following as required in the Consent Order dated

January 27,2011:

A . Established practices, procedures, and/or guidelines which include, but is not

limited to, a screening process ("Screening Process") to ensure that Respondent

does not submit debt collector registration applications to the Commissioner for

individuals prohibited by Minn. Stat. 332.33 and/or otherwise known to be

unqualified or unfit.


5/7

C A 18610 KRJ

B. Submitted its Screening Process to the Commissioner for review and made such

changes to the Screening Process the Commissioner deemed necessary.

C. Subjected all currently employed registered debt collectors to the Screening

Process to ensure compliance with M inn. Stat. 332.33 and reported to the

Commissioner any registered collectors whose employment is terminated for not

being eligible fo r registration.

D. Audited employee records o f terminated employees fo r the last five years for to

determine i f they were temiinated for reasons in whole or in part for violations o f

Minn. Stat. 332.385 (2010) and/or the FDCPA.

E. Established auditing procedures and agency policies to ensure that criminal

convictions of its debt collectors are promptly reviewed and acted upon.

4. Respondent has agreed to informal disposition o f this matter without a hearing as

provided in M inn. Stat. 14.59 (2010) and M inn. R. 1400.5900 (2009).

5. The following Order is in the public interest.

N O W THEREFORE, IT IS HEREBY ORDERED, pursuant to M inn Stat 45.027,

subd. 5 (2010) that Respondent shall cease and desist from any further violations of M inn. Stat.

332 and 45.027 (2010), and comply with all other laws o f the state of Minnesota.

IT S FURTHER ORDERED, that Respondent shall report to the Commissioner any

and a ll rejected debt collector registrations and the reasons for the rejections on a quarterly basis

during the two-year period following the effective date of this order.

IT IS FURTHER ORDERED, that Respondent shall report to the Commissioner any

debt collector terminations that occur as a result o f their Screening Process fo r the renewal

periods June 30, 2011 through June 30, 2013.


6/7

CA 18610 KRJ

IT IS FURTHER ORDERED, any report required by this Consent Order shall be in a

format as required by the Commissioner.

IT IS FURTHER ORDERED, that Respondent shall provide a copy of this Consent

Order to all states, cities or other governing bodies where the Respondent is licensed for debt

collections.

IT IS FURTHER ORDERED, pursuant to M inn. Stat. 45.027, subd. 6 (2010) that the

Respondent shall pay to the state of Minnesota a civil penalty o f $150,000. Pursuant to M inn.

Stat. 16D 17 (2010), i f Respondent fails to pay the civil penalty on or before October 1 2011,

the Commissioner may file in district court without further notice or additional proceedings. In

addition, pursuant to M inn. Stat. 16D (2010), Respondent is hereby notified that 30 days after

October 1 2011, simple interest computed in accordance with M inn. Stat. 16D.13, subd. 2

(2010) will begin to accrue on the amount of any remaining portion of the imposed civil penalty

assessed against Respondents.

This Order shall be effective upon signature by or on behalf of the Commissioner.

Dated:

By:Mike RothmanCommissioner

85 Seventh Place East, Suite 500Saint Paul, Minnesota 55101Telephone: (651) 296-2488


7/7

ONSENT TO ENTRY OF ORDER

The undersigned, acting on behalf o f Bureau of Collection Recovery L L C states that

he has read the foregoing Consent Order; that he knows and ful ly understands its contents and

effect; that he is authorized to execute this Consent to Entry o f Order on behalf o f Respondent;

that he has been advised of Respondent's right to a hearing; that Respondent has been

represented by legal counsel in this matter; or that he has been advised of Respondent's right to

be represented by legal counsel and that he has waived this right; and that he consents to entry o f

this Order by the Commissioner o f Commerce. It is further expressly understood that this Order

constitutes a settlement agreement between the parties hereto, there being no other promises or

agreements, either express or implied.

STATE OF

COUNTY OF

Bureau of Collection Recovery L L C

This instrument was acknowledged before me on

(name of person)

(stamp)

date) by iC J^i ^j/ff/lU

Title (and Rank)My commission expires

Bureau of Collection Recovery Debt Collector Enforcement Action Minnesota

Documents

Transcript of Bureau of Collection Recovery Debt Collector Enforcement Action Minnesota