A massive debt collection scheme is harassing, threatening, and deceiving millions of consumers throughout the nation into paying inflated debts or amounts they may not owe, according to a lawsuit filed Wednesday by federal and state regulators.
The Consumer Financial Protection Bureau is seeking to shut down an illegal operation, run by Douglas MacKinnon and Mark Gray, and return money to victims.
“Our lawsuit asserts that millions of consumers were harassed, threatened, and deceived as part of a massive scheme to collect inflated debts,” said Richard Cordray, director of the bureau. “Today we are taking action against the ringleaders of this operation so they can no longer prey upon vulnerable consumers."
The agency is joined in the lawsuit by the New York State Attorney General’s Office.
Northern Resolution Group, Enhanced Acquisitions, and Delray Capital are interrelated collections companies based in Buffalo, New York. The companies have purchased millions of dollars’ worth of consumer debt and collected some of those debts directly, according to the lawsuit. The companies were created and operated Douglas MacKinnon and Mark Gray and are overseen by them.
The operation routinely inflates consumer debts and relies on illegal tactics to obtain as much money as possible from consumers for debts, the lawsuit alleges. MacKinnon also set up a network of at least 60 additional fly-by-night debt-collection firms to collect on the large debt portfolios purchased by Northern Resolution Group, Enhanced Acquisitions, and Delray Capital, according to the lawsuit. The agencies charge this elaborate network also served as “window dressing,” or a workaround, when other debt sellers would no longer do business with the defendants.
MacKinnon and Gray have known about, directed, and encouraged these illegal collections practices and have profited significantly – amounting to tens of millions of dollars annually, according to the lawsuit. These illegal profits have been funneled back to MacKinnon, his relatives, and Gray through payments to various sham companies that MacKinnon, Gray, and MacKinnon’s relatives controlled, the agencies allege.
