Four Unlicensed N.Y. Debt Collection Companies Sued by West Virginia A.G.
A West Virginia Circuit Court has granted a request by Attorney General Darrell McGraw to prevent several debt collection companies from operating in the state without a license.
The court issued a temporary injunction against three New Yorkâ€“based Calvary Company debt-buying businesses â€” Cavalry SPV I, Cavalry SPV II, and Cavalry Investments â€” and Cavalry Portfolio Services, an affiliated debt collection company, after they were sued by McGrawâ€™s office for allegedly collecting debts without a license.
The injunction halts the companiesâ€™ pending lawsuits against West Virginia consumers, stops all wage garnishments, and releases all liens filed against West Virginia consumersâ€™ property as a result of judgments obtained by the companies before they became licensed to operate in the state.
The court also agreed to McGrawâ€™s request that Cavalry Company be ordered to send written notices to all consumers affected by the injunction. Under terms of the temporary order, Cavalry Company may accept voluntary payments by consumers, which must first be placed into escrow and reported to McGrawâ€™s office. The temporary injunction remains in effect until a final hearing (â€śCourt Enjoins Cavalry Debt Buyers From Collecting Debts,â€ť Office of the Attorney General of West Virginia press release, Oct. 27, 2011).
According to testimony from McGrawâ€™s staff, the defendants filed at least 1,300 debt collection lawsuits prior to becoming licensed in Oct. 2010. A total of 743 of those lawsuits resulted in more than $3 million in judgments against West Virginia consumers, 369 of which were entered by default when consumers failed to appear to contest the lawsuits.
McGrawâ€™s office first subpoenaed Cavalry Companyâ€™s West Virginia account record in Jan. 2010. Cavalry objected to the records request and asserted that the investigative subpoena couldnâ€™t be enforced once the Attorney Generalâ€™s office filed a lawsuit against the companies. The court disagreed and issued the order.
West Virginians who believe they have been a victim of a scam or wish to file a complaint can call the Attorney Generalâ€™s Consumer Protection Hotline at (800) 368-8808 or visit www.wvago.gov/takeaction.
Order Granting Temporary Injunction: State of West Virginia v. Cavalry SPV I LLC, et al. Filed October 17, 2011.
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