Four Unlicensed N.Y. Debt Collection Companies Sued by West Virginia A.G.

Recent Post Four Unlicensed N.Y. Debt Collection Companies Sued by West Virginia A.G.

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 York–based Calvary Company debt-buying businesses — Cavalry SPV I, Cavalry SPV II, and Cavalry Investments — and Cavalry Portfolio Services, an affiliated debt collection company, after they were sued by McGraw’s office for allegedly collecting debts without a license.

The injunction halts the companies’ pending lawsuits against West Virginia consumers, stops all wage garnishments, and releases all liens filed against West Virginia consumers’ property as a result of judgments obtained by the companies before they became licensed to operate in the state.

The court also agreed to McGraw’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 McGraw’s office. The temporary injunction remains in effect until a final hearing (“Court Enjoins Cavalry Debt Buyers From Collecting Debts,” Office of the Attorney General of West Virginia press release, Oct. 27, 2011).

According to testimony from McGraw’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.

McGraw’s office first subpoenaed Cavalry Company’s West Virginia account record in Jan. 2010. Cavalry objected to the records request and asserted that the investigative subpoena couldn’t be enforced once the Attorney General’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 General’s Consumer Protection Hotline at (800) 368-8808 or visit www.wvago.gov/takeaction.

Further Reading

Order Granting Temporary Injunction: State of West Virginia v. Cavalry SPV I LLC, et al. Filed October 17, 2011.

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