CHARLESTON - West Virginia Attorney General Darrell McGraw says he has reached an agreement with a California-based debt collection company, netting nearly $2 million in refunds and cancelled debts for state consumers.
On Tuesday, McGraw announced that DP and Associates, of Irvine, Calif., has agreed to pay out a total of $1.7 million.
According to the Attorney General's Office, the company engaged in "unlawful and threatening" debt collection practices and attempted to collect debts without a license.
In January, McGraw's Consumer Protection Division received a complaint against DP asserting that the company made telephone calls falsely threatening arrest and harassing family members regarding a debt allegedly owed by a consumer.
After looking into the complaint, the Attorney General's Office discovered the company did not have a license to collect debts in West Virginia.
McGraw said his office's investigation also revealed a pattern of abusive collection methods by DP in which consumers were deceitfully threatened with arrest for non-payment of fabricated debts.
For example, in one case, a Grafton-area consumer was lead to believe that if she did not pay $3,000 to the company by the end of the day a warrant would be issued for her arrest.
DP even went as far as to contact the consumer's mother-in-law and falsely state that representatives were waiting at the Taylor County courthouse for the arrest of her daughter-in-law, according to McGraw's office.
On top of that, the company inflated the alleged amount owed, upping it to $8,000 after specifying it was $5,987.10 in an email, the attorney general said.
In signing an assurance of discontinuance with McGraw's office, DP has agreed to close all West Virginia accounts with a zero balance, notify credit-reporting bureaus to delete references to the debts, refund all amounts it collected, and release any judgments obtained against the state's consumers.
The agreement secures exactly $1,714,553 in refunds and cancelled debts for 124 West Virginians, according to the Attorney General's Office.
"In these difficult economic times, it is especially heinous for companies to bully and exploit financially strapped consumers with false threats and phony debts," McGraw said in a statement Tuesday.