Cavalry Portfolio Services Fined for Abusive Debt Collection Practices

The Arizona Department of Financial Institutions recently assessed a $175,000 fine against Calvary Portfolio Services after an investigating the company’s practices and reviewing approximately sixty consumer complaints. The Department found that Calvary was unresponsive when consumers requested proof or evidence of a debt. These debts were often reported on the consumers’ credit reports without such proof or evidence of the debt being available. The company also failed to respond to the Department’s requests. As a result of the investigation, Calvary agreed to pay a $175,000 fine and to institute new policies and approaches in regards to responding to consumer concerns and requests for proof of alleged debts.

A similar and notable case against Calvary began in 2008 in Arizona. The company was investigated by the Arizona Department of Financial Institutions and found that Calvary was not conducting its own investigation into claims of identity theft or when a consumer disputed a debt. It would continue to contact consumers and assert that the debt was legitimate regardless of the dispute filed by the consumer. The Department assessed a $15,000 fine against Calvary in this case.

Calvary Portfolio Services was founded in 2002. Debt collection cases filed by the company are often filed under various derivations of its name including, “Calvary SPV I, LLC,” “Calvary SPV II, LLC,” and “Calvary SPV IV, LLC.” It often buys portfolios of old debt from banks, credit card companies, hospitals, doctors, cell phone companies, and car companies. The company has historically violated the Fair Debt Collection Practices Act and has been sued on a regular basis by consumers for such violations. In the past three years, 252 complaints have been filed with the Better Business Bureau, 98 of which have been made in the last year. The complaints commonly state that Calvary Portfolio Services sends collection statements to consumers for accounts that either have already been paid or do not belong to the consumer. Additionally, the consumers state that their credit reports have been adversely affected by these false charges.

In February 2016, the West Virginia Attorney General announced a settlement with Calvary. This settlement requires Calvary to cease attempts to collect $19.7 million in debt from 2,847 consumers in addition to paying $350,000 to the State of West Virginia. The settlement stemmed from an investigation into complaints alleging that the company engaged in debt collection practices without a West Virginia license and surety bond, as required by the state’s Collection Agency Act. Additionally, the West Virginia Attorney General alleged that Calvary engaged in abusive debt collection practices including harassing consumers with excessive phone calls and failing to identify the account owner in collection letters. In addition to the monetary penalties, Calvary agreed to delete all account information from the affected consumers’ credit reports and release all liens filed against the affected consumers’ property.

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