McGraw
CHARLESTON – Kanawha Circuit Court has entered an order preventing three Cavalry Company debt-buying businesses from collecting debts in West Virginia without a license.
The order also required Cavalry to stop all wage garnishments and to release all liens filed against West Virginia consumers' property stemming from judgments obtained by its companies before they became licensed.
The court granted West Virginia Attorney General Darrell McGraw's motion for a temporary injunction against Cavalry.
It is also ordered the New York-based debt buyers—Cavalry SPV I, Cavalry SPV II and Cavalry Investments plus a collection affiliate, Cavalry Portfolio Services—to fully comply with the attorney general's investigative subpoena.
Testimony from McGraw's staff during a series of hearings disclosed that Cavalry debt buyers had filed at least 1,300 collections lawsuits prior to becoming licensed in October 2010.
Of those lawsuits, 743 resulted in judgments totaling more than $3 million against West Virginia consumers, with 369 entered by default when the consumers failed to appear or contest the suit.
In conjunction with the attorney general, the circuit court also ordered Cavalry to send written notices to all consumers affected by the order.
After the notices are sent, Cavalry may accept payments made voluntarily by consumers but must first place them into escrow and report all payments received to the attorney general's office.
McGraw's office first subpoenaed Cavalry's West Virginia account records in January 2010. Cavalry objected to complying with the records request and later asserted that the investigative subpoena could not be enforced once the lawsuit was filed. The circuit court disagreed.
There has not been a trial date scheduled yet.