DOB: Accelerated Collection Systems, Inc., Order of Summary Suspension, Temporary Order to Cease and Desist, Notice of Intent to Issue Order to Cease and Desist, Refuse to Renew Consumer Collection Agency License, Impose Civil Penalty and Right to Hearing

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IN THE MATTER OF:

ACCELERATED COLLECTION
SYSTEMS, INC.

    ("Respondent")

 
 


 


 

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ORDER OF SUMMARY SUSPENSION

TEMPORARY ORDER TO
CEASE AND DESIST

NOTICE OF INTENT TO ISSUE
ORDER TO CEASE AND DESIST

NOTICE OF INTENT TO REFUSE TO
RENEW CONSUMER COLLECTION
AGENCY LICENSE

NOTICE OF INTENT TO IMPOSE
CIVIL PENALTY

AND

NOTICE OF RIGHT TO HEARING

I. PRELIMINARY STATEMENT

The Banking Commissioner (ďCommissionerĒ) is charged with the administration of Part XII of Chapter 669, Sections 36a-800 to 36a-810, inclusive, of the Connecticut General Statutes, ďConsumer Collection AgenciesĒ.
 
Pursuant to the authority granted by Section 36a-17 of the Connecticut General Statutes, the Commissioner, through the Consumer Credit Division (ďDivisionĒ) of the Department of Banking, has investigated the activities of Respondent to determine if it has violated, is violating or is about to violate the provisions of the Connecticut General Statutes.  Section 36a-17(a) of the Connecticut General Statutes provides:

The commissioner, in the commissionerís discretion, may make such public or private investigations or examinations within or outside this state, concerning any person subject to the jurisdiction of the commissioner, as the commissioner deems necessary to carry out the duties of the commissioner.

Section 36a-52(a) of the Connecticut General Statutes provides, in pertinent part:

Whenever it appears to the commissioner that any person has violated, is violating or is about to violate any provision of the general statutes within the jurisdiction of the commissioner, or any regulation . . . adopted . . . thereunder, the commissioner may send a notice to such person by registered or certified mail, return receipt requested, or by any express delivery carrier that provides a dated delivery receipt.  The notice shall be deemed received by the person on the earlier of the date of actual receipt, or seven days after mailing or sending.  Any such notice shall include:  (1) A statement of the time, place, and nature of the hearing; (2) a statement of the legal authority and jurisdiction under which the hearing is to be held; (3) a reference to the particular sections of the general statutes, [or] regulations . . . alleged to have been violated; (4) a short and plain statement of the matters asserted; and (5) a statement indicating that such person may file a written request for a hearing on the matters asserted within fourteen days of receipt of the notice.  If a hearing is requested within the time specified in the notice, the commissioner shall hold a hearing upon the matters asserted in the notice, unless the person fails to appear at the hearing.  After the hearing, the commissioner shall determine whether an order to cease and desist should be issued against the person named in the notice.  If the person does not request a hearing within the time specified in the notice or fails to appear at the hearing, the commissioner shall issue an order to cease and desist against the person.  No such order shall be issued except in accordance with the provisions of chapter 54.

Section 36a-52(b) of the Connecticut General Statutes, as amended by Public Act 07-91, provides:

If the commissioner finds that the public welfare requires immediate action, the commissioner may incorporate a finding to that effect in the notice sent in accordance with subsection (a) of this section and issue a temporary order requiring the person to cease and desist from the activity which constitutes such alleged violation and to take or refrain from taking such action as in the opinion of the commissioner will effectuate the purposes of this section.  Such temporary order shall become effective on receipt and, unless set aside or modified by a court, shall remain in effect until the effective date of a permanent order or dismissal of the matters asserted in the notice.

Section 36a-51(a) of the Connecticut General Statutes, as amended by Public Act 07-91, provides, in pertinent part:

The commissioner may . . . refuse to renew any license issued by the commissioner under any provision of the general statutes by sending a notice to the licensee by registered or certified mail, return receipt requested, or by any express delivery carrier that provides a dated delivery receipt.  The notice shall be deemed received by the licensee on the earlier of the date of actual receipt or seven days after mailing or sending.  Any such notice shall include:  (1) A statement of the time, place, and nature of the hearing; (2) a statement of the legal authority and jurisdiction under which the hearing is to be held; (3) a reference to the particular sections of the general statutes, [or] regulations . . . involved; (4) a short and plain statement of the matters asserted; and (5) a statement indicating that the licensee may file a written request for a hearing on the matters asserted within fourteen days of receipt of the notice.  If the commissioner finds that public health, safety or welfare imperatively requires emergency action, and incorporates a finding to that effect in the notice, the commissioner may order summary suspension of a license in accordance with subsection (c) of section 4-182 and require the licensee to take or refrain from taking such action as in the opinion of the commissioner will effectuate the purposes of this section, pending proceedings for . . . refusal to renew.

Section 36a-51(b) of the Connecticut General Statutes provides, in pertinent part:

If a hearing is requested within the time specified in the notice, the commissioner shall hold a hearing upon the matters asserted in the notice unless the licensee fails to appear at the hearing.  After the hearing, the commissioner shall suspend . . . or refuse to renew the license for any reason set forth in the applicable licensing provisions of the general statutes if the commissioner finds sufficient grounds exist for such . . . refusal to renew.  If the licensee does not request a hearing within the time specified in the notice or fails to appear at the hearing, the commissioner shall . . . refuse to renew the license.

Section 4-182(c) of the Connecticut General Statutes provides, in pertinent part:

If the agency finds that public health, safety or welfare imperatively requires emergency action, and incorporates a finding to that effect in its order, summary suspension of a license may be ordered pending proceedings for revocation or other action.  These proceedings shall be promptly instituted and determined.

Section 36a-50(a) of the Connecticut General Statutes provides, in pertinent part:

(1)  Whenever the commissioner finds as the result of an investigation that any person has violated any provision of the general statutes within the jurisdiction of the commissioner, or any regulation . . . adopted . . . thereunder, the commissioner may send a notice to such person by registered or certified mail, return receipt requested, or by any express delivery carrier that provides a dated delivery receipt.  The notice shall be deemed received by the person on the earlier of the date of actual receipt or seven days after mailing or sending.  Any such notice shall include:  (A) A statement of the time, place, and nature of the hearing; (B) a statement of the legal authority and jurisdiction under which the hearing is to be held; (C) a reference to the particular sections of the general statutes, [or] regulations . . . alleged to have been violated; (D) a short and plain statement of the matters asserted; (E) the maximum penalty that may be imposed for such violation; and (F) a statement indicating that such person may file a written request for a hearing on the matters asserted within fourteen days of receipt of the notice.

(2)  If a hearing is requested within the time specified in the notice, the commissioner shall hold a hearing upon the matters asserted in the notice unless such person fails to appear at the hearing.  After the hearing, if the commissioner finds that the person has violated any such provision, [or] regulation, . . . the commissioner may, in the commissionerís discretion and in addition to any other remedy authorized by law, order that a civil penalty not exceeding one hundred thousand dollars per violation be imposed upon such person.  If such person does not request a hearing within the time specified in the notice or fails to appear at the hearing, the commissioner may, as the facts require, order that a civil penalty not exceeding one hundred thousand dollars per violation be imposed upon such person.

(3)  Each action undertaken by the commissioner under this subsection shall be in accordance with the provisions of chapter 54.


II.  MATTERS ASSERTED

1. Respondent is a Connecticut corporation with its principal place of business at 182 Grand Street, Suite 320, Waterbury, Connecticut.
2. Raymond Beaulieu (ďBeaulieuĒ) is President of Respondent and Sandra A. Kinney (ďKinneyĒ) is Vice President and Office Manager.
3. Since November 9, 1981, Respondent has been licensed pursuant to Section 36a-801 of the Connecticut General Statutes to act within Connecticut as a consumer collection agency.
4. On September 17, 2007, Respondent filed an Application for Renewal of Consumer Collection Agency License.
5. On October 24, 30 and 31, and November 6, 2007, examiners from the Division attempted to conduct an examination of Respondent and were denied access to Respondentís records.  By letter dated November 6, 2007, the Division asked Respondent to provide it with certain specified documents, and gave it the opportunity to show compliance with all lawful requirements for the retention of its license.
6. On October 30, 2007, an action in Waterbury Superior Court was filed against Respondent seeking appointment of a receiver.
7. During October 2007, Respondent commingled money collected for creditors with its own funds and used creditorsí money for the conduct of Respondentís business.
8.
Respondent has effectively terminated its business inasmuch as Beaulieu has not been at Respondentís office since October 24, 2007, Kinney resigned on October 3, 2007, and of the 16 other employees of Respondent, only one employee remains as of this date.
 

III.  STATUTORY AND REGULATORY BASIS FOR TEMPORARY ORDER
TO CEASE AND DESIST, ORDER TO CEASE AND DESIST,
REFUSAL TO RENEW CONSUMER COLLECTION AGENCY LICENSE
AND IMPOSITION OF CIVIL PENALTY

1. Respondentís failure to cooperate with the Commissioner pursuant to Section 36a-17(d) of the Connecticut General Statutes, as more fully described in paragraph 5 of the Matters Asserted, forms the basis to issue an order to cease and desist and to impose a civil penalty pursuant to Sections 36a-52(a) and 36a-50(a) of the Connecticut General Statutes, and constitutes grounds to refuse to renew its consumer collection agency license pursuant to Section 36a-51 of the Connecticut General Statutes, as amended, and Section 36a-804(a) of the Connecticut General Statutes, as amended by Public Act 07-91.  Section 36a-50(a) of the Connecticut General Statutes authorizes the Commissioner to impose a civil penalty upon Respondent in an amount not to exceed One Hundred Thousand Dollars ($100,000) per violation.  The Commissioner intends to impose a civil penalty upon Respondent not to exceed One Hundred Thousand Dollars ($100,000), subject to Respondentís right to a hearing on the allegations set forth above.
2. Respondentís conduct, as more fully described in paragraphs 5 through 8, inclusive, of the Matters Asserted, illustrates that Respondent lacks financial responsibility and is not in all respects properly qualified and trustworthy and that the granting of a consumer collection agency license to Respondent would be against the public interest, which constitutes grounds to refuse to renew Respondentís consumer collection agency license pursuant to Sections 36a-804(a) and 36a-51 of the Connecticut General Statutes, as amended.
3. Respondentís conduct, as more fully described in paragraph 7 of the Matters Asserted, constitutes a violation of Section 36a-805(a) of the Connecticut General Statutes and Section 36a-809-1(b) of the Regulations of Connecticut State Agencies, which forms the basis to issue an order to cease and desist pursuant to Sections 36a-804(b) and 36a-52(a) of the Connecticut General Statutes and an order imposing civil penalty pursuant to Sections 36a-804(b) and 36a-50(a) of the Connecticut General Statutes, and constitutes grounds to refuse to renew Respondentís consumer collection agency license pursuant to Sections 36a-804(a) and 36a-51 of the Connecticut General Statutes, as amended.  Section 36a-50(a) of the Connecticut General Statutes authorizes the Commissioner to impose a civil penalty upon Respondent in an amount not to exceed One Hundred Thousand Dollars ($100,000) per violation.  The Commissioner intends to impose a civil penalty upon Respondent not to exceed One Hundred Thousand Dollars ($100,000), subject to Respondentís right to a hearing on the allegations set forth above.
4.
Respondentís conduct as described in paragraph 8 of the Matters Asserted constitutes a violation of Section 36a-809-4 of the Regulations of Connecticut State Agencies which forms the basis to issue an order to cease and desist pursuant to Sections 36a-804(b) and 36a-52(a) of the Connecticut General Statutes and an order imposing civil penalty pursuant to Sections 36a-804(b) and 36a-50(a) of the Connecticut General Statutes, and constitutes grounds to refuse to renew Respondentís consumer collection agency license pursuant to Sections 36a-804(a) and 36a-51 of the Connecticut General Statutes, as amended.  Section 36a-50(a) of the Connecticut General Statutes authorizes the Commissioner to impose a civil penalty upon Respondent in an amount not to exceed One Hundred Thousand Dollars ($100,000) per violation.  The Commissioner intends to impose a civil penalty upon Respondent not to exceed One Hundred Thousand Dollars ($100,000), subject to Respondentís right to a hearing on the allegations set forth above.
 

IV.  ORDER OF SUMMARY SUSPENSION, TEMPORARY ORDER TO
CEASE AND DESIST, NOTICE OF INTENT TO ISSUE ORDER
TO CEASE AND DESIST, NOTICE OF INTENT TO REFUSE TO RENEW
CONSUMER COLLECTION AGENCY LICENSE, NOTICE OF INTENT TO
IMPOSE CIVIL PENALTY AND NOTICE OF RIGHT TO HEARING

WHEREAS, the Commissioner has reason to believe that Respondent has engaged in acts or conduct which forms a basis to issue an order to cease and desist against Respondent pursuant to Sections 36a-804(b) and 36a-52(a) of the Connecticut General Statutes and to impose a civil penalty against Respondent for each violation pursuant to Sections 36a-804(b) and 36a-50(a) of the Connecticut General Statutes; and constitutes grounds to refuse to renew its consumer collection agency license pursuant to Sections 36a-804(a) and 36a-51 of the Connecticut General Statutes, as amended;
 
AND WHEREAS, the Commissioner finds that public safety and welfare require emergency action with respect to Respondentís license to act as a consumer collection agency because consumers and creditors may be financially harmed as a result of its commingling of funds collected for creditors with its own funds and use of such funds for the conduct of its business, and because there is virtually no staff to operate the business.
 
NOW THEREFORE, pursuant to the authority granted in Sections 36a-804(a) and 36a-51 of the Connecticut General Statutes, as amended, and Section 4-182(c) of the Connecticut General Statutes, the Commissioner ORDERS that Respondentís consumer collection agency license in Connecticut be and is hereby SUMMARILY SUSPENDED from pending proceedings for refusal to renew license.
 
THE COMMISSIONER FURTHER ORDERS, pursuant to Section 36a-52(b) of the Connecticut General Statutes, as amended, that Respondent immediately CEASE AND DESIST from further violations of Section 36a-17(d) and 36a-805 of the Connecticut General Statutes and Section 36a-809-1 of the Regulations of Connecticut State Agencies.  This Temporary Order shall become effective upon receipt by Respondent and, unless set aside or modified by a court, shall remain in effect until the effective date of a permanent order or dismissal of the matters asserted in this Order.
 
THE COMMISSIONER FURTHER ORDERS, pursuant to Sections 36a-51(a) and 36a-52(b) of the Connecticut General Statutes, as amended, that Respondent shall take the following actions:

(1) Not collect or receive for payment for others any new account, bill or other indebtedness from a consumer debtor;
(2) Take steps to wind down and terminate its consumer collection agency business no later than ninety (90) days from the date of this order;
(3) Notify all existing clients in writing of the proposed termination and its date at least thirty (30) days prior to such date;
(4) As soon as possible, provide each of its clients with a detailed final accounting of such clientís consumer debtor accounts;
(5) As soon as possible, remit to each of its clients the money owed to such clients;
(6) As soon as possible, return to each of its clients all papers, documents and other property of the clients turned over to Respondent in connection with its collection efforts;
(7) Commencing on November 21, 2007, provide via e-mail to the Division at alan.cicchetti@ct.gov a daily accounting of:  (a) all funds received from consumer debtors, and (b) payments made on behalf of consumer debtors to its clients; and
(8)
Provide to the Division verification of compliance with paragraphs (2) through (6) of this order.

FURTHER,
notice is hereby given to Respondent that the Commissioner intends to:  (1) issue an order requiring Respondent to CEASE AND DESIST from violating Sections 36a-17 and 36a-805 of the Connecticut General Statutes and Section 36a-809-1 of the Regulations of Connecticut State Agencies; (2) REFUSE TO RENEW Respondentís consumer collection agency license in Connecticut; and (3) impose a CIVIL PENALTY upon Respondent in an amount not to exceed Three Hundred Thousand Dollars ($300,000), subject to its right to a hearing on the allegations set forth above.
 
A hearing will be granted to Respondent if a written request for a hearing is received by the Department of Banking, Legal Division, 260 Constitution Plaza, Hartford, Connecticut 06103-1800 within fourteen (14) days following its receipt of this Order of Summary Suspension, Temporary Order to Cease and Desist, Notice of Intent to Issue Order to Cease and Desist, Notice of Intent to Refuse to Renew Consumer Collection Agency License, Notice of Intent to Impose Civil Penalty and Notice of Right to Hearing as set forth in Sections 36a-52(a), 36a-51(b) and 36a-50(a) of the Connecticut General Statutes.  This Order of Summary Suspension, Temporary Order to Cease and Desist, Notice of Intent to Issue Order to Cease and Desist, Notice of Intent to Refuse to Renew Consumer Collection Agency License, Notice of Intent to Impose Civil Penalty and Notice of Right to Hearing shall be deemed received on the earlier of the date of actual receipt, or seven days after mailing or sending.  The enclosed Appearance and Request for Hearing Form must be completed and mailed to the above address.  If Respondent will not be represented by an attorney at the hearing, please complete the Appearance and Request for Hearing Form as ďpro se.Ē  Once a written request for a hearing is received, the Commissioner may issue a notification of hearing and designation of hearing officer that acknowledges receipt of a request for a hearing, designates a hearing officer and sets the date of the hearing in accordance with Section 4-177 of the Connecticut General Statutes and Section 36a-1-21 of the Regulations of Connecticut State Agencies.  If a hearing is requested, the hearing will be held on January 22, 2008, at 9 a.m. at the Department of Banking, 260 Constitution Plaza, Hartford, Connecticut.
 
The hearing will be held in accordance with the provisions of Chapter 54 of the Connecticut General Statutes, unless Respondent fails to appear at the requested hearing.  At such hearing, Respondent will have the right to appear and present evidence, rebuttal evidence and argument on all issues of fact and law to be considered by the Commissioner.
 
If Respondent does not request a hearing within the time prescribed, the Commissioner will issue an order that Respondent cease and desist from violating Sections 36a-17(d) and 36a-805 of the Connecticut General Statutes and Section 36a-809-1 of the Regulations of Connecticut State Agencies, will refuse to renew Respondentís license to act as a consumer collection agency in Connecticut, and may order that the maximum civil penalty in an amount not to exceed Three Hundred Thousand Dollars ($300,000) be imposed upon Respondent.


So ordered at Hartford, Connecticut
this 16th day of November 2007.        ________/s/_________
                                                    Howard F. Pitkin
                                                    Banking Commissioner



CERTIFICATION

I hereby certify that on this 16th day of November 2007, the foregoing Order of Summary Suspension, Temporary Order to Cease and Desist, Notice of Intent to Issue Order to Cease and Desist, Notice of Intent to Refuse to Renew Consumer Collection Agency License, Notice of Intent to Impose Civil Penalty and Notice of Right to Hearing was sent by registered mail, return receipt requested, to Accelerated Collection Systems, Inc., 182 Grand Street, Suite 320, P. O. Box 2724, Waterbury, Connecticut 06723, registered mail no. RB028034335US; and via facsimile to (203) 597-9428.

________/s/_________
Nirja Savill
Prosecuting Attorney

 

Administrative Orders and Settlements