DOB: United Collections Recovery, LLC - Ord Rest - NOI CD-CP

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IN THE MATTER OF:
 
UNITED COLLECTIONS
RECOVERY, LLC
("United Collections Recovery")

CHARLES LOCKWOOD
("Lockwood")
 
    (collectively, "Respondents")
 
 
 
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ORDER TO MAKE RESTITUTION

NOTICE OF INTENT TO ISSUE
ORDER TO CEASE AND DESIST

NOTICE OF INTENT TO IMPOSE
CIVIL PENALTY

                       AND

NOTICE OF RIGHT TO HEARING


 
I. LEGAL AUTHORITY AND JURISDICTION

The Banking Commissioner (“Commissioner”) is charged with the administration of Part XII of Chapter 669, Sections 36a-800 to 36a-810, inclusive, of the Connecticut General Statutes, “Consumer Collection Agencies”, and Sections 36a-809-6 to 36a-809-17, inclusive, of the Regulations of Connecticut State Agencies (“Regulations”).

Pursuant to the authority granted by Section 36a-17 of the Connecticut General Statutes, the Commissioner, through the Consumer Credit Division (“Division”) of the Department of Banking, has investigated the activities of Respondents to determine if they have violated, are violating or are about to violate the provisions of the Connecticut General Statutes or Regulations within the jurisdiction of the Commissioner.
 
Section 36a-17(a) of the Connecticut General Statutes provides, in pertinent part, that:

The commissioner, in the commissioner’s discretion, may, subject to the provisions of section 36a-21 and the Freedom of Information Act, as defined in section 1-200; (1) 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, (2) require or permit any person to testify, produce a record or file a statement in writing, under oath, or otherwise as the commissioner determines, as to all the facts and circumstances concerning the matter to be investigated or about which an action or proceeding is pending . . . .

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

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-50 of the Connecticut General Statutes provides, in pertinent part, that:

(a)(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 not later than fourteen days after 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 commissioner’s 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. . . .

(c)  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 . . . under said provisions, the commissioner may, in addition to any other remedy authorized by law, order such person to (1) make restitution of any sums shown to have been obtained in violation of any such provision, [or] regulation . . . plus interest at the legal rate set forth in section 37-1 . . . .  After the commissioner issues such an order, the person named in the order may, not later than fourteen days after the receipt of such order, file a written request for a hearing.  The order 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 hearing shall be held in accordance with the provisions of chapter 54.


II.  MATTERS ASSERTED

1.
United Collections Recovery is a limited liability company organized under the laws of Delaware with offices located at 4023 Kennett Pike, Suite 266, Wilmington, Delaware, and 1521 Concord Pike, Wilmington, Delaware.
2.
At all times relevant hereto, Lockwood was the Manager of United Collection Recovery, and received or expected to receive compensation from United Collections Recovery.
3.
Between October 2013 to March 2014, Respondents collected at least $2,590.02 from a consumer debtor located in Connecticut with respect to a payday loan.
4.
United Collection Recovery purchased such loan from Western Sky/CashCall.
5.Western Sky / CashCall is an unlicensed small loan lender.
6.At no time relevant hereto were Respondents licensed to act as consumer collection agencies in Connecticut nor were Respondents otherwise exempt from such licensure.
7.
On September 25, 2014, the Commissioner received a complaint from the consumer debtor referred to in paragraph 3 above regarding Respondents’ activities in Connecticut.

III.  STATUTORY BASIS FOR ORDER TO MAKE RESTITUTION,  
   ORDER TO CEASE AND DESIST AND IMPOSITION OF CIVIL PENALTY

Section 36a-800(2) of the Connecticut General Statutes provides, in pertinent part, that:

“Consumer collection agency” means any person (A) engaged as a third party in the business of collecting or receiving for payment for others of any account, bill or other indebtedness from a consumer debtor, (B) engaged directly or indirectly in the business of collecting any account, bill or other indebtedness from a consumer debtor for such person’s own account if the indebtedness was acquired from another person and if the indebtedness was either delinquent or in default at the time it was acquired. . . .

Section 36a-801(a) of the Connecticut General Statutes provides, in part, that:

No person shall act within this state as a consumer collection agency unless such person has first obtained a consumer collection agency license for such person’s main office and each branch office where such person’s business is conducted. A consumer collection agency is acting within this state if it (1) has its place of business located within this state; (2) has its place of business located outside this state and (A) collects from consumer debtors or property tax debtors who reside within this state for creditors who are located within this state, or (B) collects from consumer debtors or property tax debtors who reside within this state for such consumer collection agency’s own account; (3) has its place of business located outside this state and regularly collects from consumer debtors or property tax debtors who reside within this state for creditors who are located outside this state. . . . 

Section 36a-804(b) of the Connecticut General Statute, as amended by Public Act 15-235, provides that:

Whenever it appears to the commissioner that any person has violated, is violating or is about to violate any of the provisions of sections 36a-800 to 36a-810, inclusive, or any regulation adopted pursuant thereto, or the licensee or any proprietor, director, officer, member, partner, shareholder, trustee, employee or agent of such licensee has committed any fraud, made any misrepresentation or misappropriated funds, the commissioner may take action against such person or licensee in accordance with sections 36a-50 and 36a-52.

1.
United Collections Recovery’s conduct, as more fully described in paragraphs 1, 3, 6 and 7 of the Matters Asserted, constitutes a violation of Section 36a-801(a) of the Connecticut General Statutes.  Such violation forms the basis to issue an order to cease and desist pursuant to Section 36a-804(b) of the Connecticut General Statutes, as amended, and Section 36a-52(a) of the Connecticut General Statutes, issue an order to make restitution pursuant to Section 36a-804(b) of the Connecticut General Statutes, as amended, and Section 36a-50(c) of the Connecticut General Statutes, and to impose a civil penalty pursuant to Section 36a-804(b) of the Connecticut General Statutes, as amended, and Section 36a-50(a) of the Connecticut General Statutes.  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.
2.
Lockwood’s conduct, as more fully described in paragraphs 2, 3, 6 and 7 of the Matters Asserted, constitutes a violation of Section 36a-801(a) of the Connecticut General Statutes.  Such violation forms the basis to issue an order to cease and desist pursuant to Section 36a-804(b) of the Connecticut General Statutes, as amended, and Section 36a-52(a) of the Connecticut General Statutes, issue an order to make restitution pursuant to Section 36a-804(b) of the Connecticut General Statutes, as amended, and Section 36a-50(c) of the Connecticut General Statutes, and to impose a civil penalty pursuant to Section 36a-804(b) of the Connecticut General Statutes, as amended, and Section 36a-50(a) of the Connecticut General Statutes.  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.

         
IV.  ORDER TO MAKE RESTITUTION, NOTICE OF INTENT TO ISSUE ORDER TO
CEASE AND DESIST, NOTICE OF INTENT TO IMPOSE CIVIL
PENALTY AND NOTICE OF RIGHT TO HEARING

WHEREAS, the Commissioner has reason to believe that Respondents have engaged in acts or conduct which constitutes sufficient grounds for the Commissioner to issue an order to make restitution pursuant to Section 36a-50(c) of the Connecticut General Statutes, and forms a basis to issue an order to cease and desist against Respondents pursuant to Section 36a-804(b) of the Connecticut General Statutes, as amended, and Section 36a-52(a) of the Connecticut General Statutes and impose a civil penalty upon Respondents pursuant to Section 36a-804(b) of the Connecticut General Statutes, as amended, and Section 36a-50(a) of the Connecticut General Statutes.

THE COMMISSIONER THEREFORE ORDERS, pursuant to Section 36a-50(c) of the Connecticut General Statutes, that United Collections Recovery, LLC and Charles L. Lockwood MAKE RESTITUTION of any sums obtained as a result of United Collections Recovery, LLC and Charles L. Lockwood violating Section 36a-801(a) of the Connecticut General Statutes, plus interest at the legal rate set forth in Section 37-1 of the Connecticut General Statutes.  Specifically, the Commissioner ORDERS that:  Not later than thirty (30) days from the date this Order to Make Restitution becomes permanent, United Collections Recovery, LLC and Charles L. Lockwood shall:

1.
Promptly refund $2,590.02 to the consumer debtor identified in Exhibit A attached hereto, and refund all monies that United Collections Recovery, LLC and Charles L. Lockwood collected or received for payment for others of any account, bill or other indebtedness from a Connecticut consumer debtor and collected with respect to any account, bill or other indebtedness from a Connecticut consumer debtor for United Collections Recovery, LLC or Charles L. Lockwood’s own account if the indebtedness was acquired from another person and if the indebtedness was either delinquent or in default at the time it was acquired.  United Collections Recovery, LLC and Charles L. Lockwood shall promptly provide to Carmine Costa, Director, Consumer Credit Division, Department of Banking, 260 Constitution Plaza, Hartford, Connecticut 06103-1800, or carmine.costa@ct.gov, evidence of such refunds.

NOW THEREFORE, notice is hereby given to Respondents that the Commissioner intends to issue an order requiring Respondents to CEASE AND DESIST from violating Section 36a-801(a) of the Connecticut General Statutes, and impose a CIVIL PENALTY upon each of the Respondents as set forth herein, subject to Respondents’ right to a hearing on the allegations set forth above.

A hearing will be granted to each Respondent if a written request for a hearing is received by the Department of Banking, Consumer Credit Division, 260 Constitution Plaza, Hartford, Connecticut 06103-1800 within fourteen (14) days following each Respondent’s receipt of this Order to Make Restitution, Notice of Intent to Issue Order to Cease and Desist, Notice of Intent to Impose Civil Penalty and Notice of Right to Hearing as set forth in Section 36a-52(a) and subsections (a) and (c) of Section 36a-50 of the Connecticut General Statutes.  This Order to Make Restitution, Notice of Intent to Issue Order to Cease and Desist, 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.  To request a hearing, complete and return the enclosed Appearance and Request for Hearing Form to the above address.  If any Respondent will not be represented by an attorney at the hearing, please complete the Appearance and Request for Hearing Form as “pro se”.  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 December 2, 2015, at 10 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 such Respondent fails to appear at the requested hearing.  At such hearing, Respondents 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 United Collections Recovery does not request a hearing within the time period prescribed or fails to appear at any such hearing, the allegations herein will be deemed admitted.  Accordingly, the Order to Make Restitution shall remain in effect and become permanent against United Collections Recovery, and the Commissioner will issue an order that United Collections Recovery cease and desist from violating Section 36a-801(a) of the Connecticut General Statutes, and may order a civil penalty in an amount not to exceed One Hundred Thousand Dollars ($100,000) per violation be imposed upon United Collections Recovery.

If Lockwood does not request a hearing within the time period prescribed or fails to appear at any such hearing, the allegations herein will be deemed admitted.  Accordingly, the Order to Make Restitution shall remain in effect and become permanent against Lockwood, and the Commissioner will issue an order that Lockwood cease and desist from violating Section 36a-801(a) of the Connecticut General Statutes, and may order a civil penalty in an amount not to exceed One Hundred Thousand Dollars ($100,000) per violation be imposed upon Lockwood.

So ordered at Hartford, Connecticut
this 9th day of October 2015.                       ________/s/_________
                                                                 Jorge L. Perez
                                                                 Banking Commissioner


CERTIFICATION

I hereby certify that on this 9th day of October 2015, I caused to be mailed by certified mail, return receipt requested, the foregoing Order to Make Restitution, Notice of Intent to Issue Order to Cease and Desist, Notice of Intent to Impose Civil Penalty and Notice of Right to Hearing to United Collections Recovery, LLC, Attention:  Charles Lockwood, Manager, 4023 Kennett Pike, Suite 266, Wilmington, Delaware 19807,certified mail no. 70133020000042269449; 1750 Highway 160 West, Suite 101 #127, Fort Mill, South Carolina 29708, certified mail no. 70133020000042269456; and 1521 Concord Pike, Wilmington, Delaware 19803, certified mail no. 70133020000042269463; and to Incorp Services, Inc., Registered Agent, 1201 Orange Street, Suite 600, One Commerce Center, Wilmington, Delaware 19899, certified mail no. 70133020000042269470; 317 Ruth Vista Road, Lexington, South Carolina 29073, certified mail no. 70133020000042269487; and 17888 67th Court North, Loxahatchee, Florida 33470, certified mail no. 70133020000042269494; and Charles Lockwood, Registered Agent, 200 Regency Executive Park Drive, Suite 20, Charlotte, North Carolina 28217, certified mail no. 70133020000042269500; and to Charles Lockwood, 4023 Kennett Pike, Suite 266, Wilmington, Delaware 19807, certified mail no. 70133020000042269517; and 1521 Concord Pike, Suite 301, Wilmington, Delaware 19803, certified mail no. 70133020000042269524.

                                                              ________/s/_________
                                                              Amy Grillo
                                                              Secretary


Administrative Orders and Settlements