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IN THE MATTER OF: OXFORD COLLECTION AGENCY, INC. ("Respondent")
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NOTICE OF INTENT TO REVOKE NOTICE OF INTENT TO ISSUE NOTICE OF INTENT TO IMPOSE 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 the regulations promulgated thereunder (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(a) of the Connecticut General Statutes, and Section 36a-806(a) of the 2010 Supplement to the General Statutes, the Commissioner, through the Consumer Credit Division (“Division”) of the Department of Banking, has investigated the activities of Respondent to determine if it has violated, is violating or is about to violate the provisions of the Connecticut General Statutes. Section 36a-17(a) of the Connecticut General Statutes provides that:
Pursuant to the authority granted by Section 36a-17(a) of the Connecticut General Statutes, and Section 36a-806(a) of the 2010 Supplement to the General Statutes, the Commissioner, through the Consumer Credit Division (“Division”) of the Department of Banking, has investigated the activities of Respondent to determine if it has violated, is violating or is about to violate the provisions of the Connecticut General Statutes. Section 36a-17(a) of the Connecticut General Statutes provides that:
The commissioner, in the commissioner’s discretion, may 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.
Section 36a-806(a) of the 2010 Supplement to the General Statutes provides, in pertinent part, that:
The commissioner shall have power to examine the affairs of every consumer collection agency in this state in order to determine whether it has been or is engaged in any act or practice prohibited by sections 36a-805 to 36a-808, inclusive.
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-51 of the 2010 Supplement to the General Statutes provides, in pertinent part, that:
(a) The commissioner may . . . revoke or refuse to renew any license issued by the commissioner under any provision of the general statutes by sending a notice to the licensee 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 licensee 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 . . . involved; (4) a short and plain statement of the matters asserted; and (5) a statement indicating that the licensee may file a written request for a hearing on the matters asserted within fourteen days of receipt of the notice.
(b) 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 licensee fails to appear at the hearing. After the hearing, the commissioner shall . . . revoke or refuse to renew the license for any reason set forth in the applicable licensing provisions of the general statutes if the commissioner finds sufficient grounds exist for such . . . revocation or refusal to renew. If the licensee does not request a hearing within the time specified in the notice or fails to appear at the hearing, the commissioner shall . . . revoke or refuse to renew the license. No such license shall be . . . revoked except in accordance with the provisions of chapter 54.
Section 36a-50(a) of the Connecticut General Statutes provides, in pertinent part, that:
(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 within fourteen days of 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.
Section 4-182(b) of the Connecticut General Statutes provides that:
When a licensee has made timely and sufficient application for the renewal of a license or a new license with reference to any activity of a continuing nature, the existing license shall not expire until the application has been finally determined by the agency, and, in case the application is denied or the terms of the new license limited, until the last day for seeking review of the agency order or a later date fixed by order of the reviewing court.
II. MATTERS ASSERTED
| 1. |
Respondent is a New York corporation with its main office located at 135 Maxess Road, Melville, New York. |
| 2. |
Since October 1, 2007, Respondent has been licensed pursuant to Section 36a-801 of the 2010 Supplement to the General Statutes, to act within Connecticut as a consumer collection agency. |
| 3. |
From at least July 1 through September 30, 2008, Respondent commingled money collected from debtors on behalf of creditors with its own funds and used such money for the conduct of Respondent’s business. |
| 4. |
On June 10, 2009, a Consent Decree entered into by Respondent and Richard Pinto, Peter Pinto and Charles Harris, individually, and as officers of Respondent, and the Federal Trade Commission, was filed in the United States District Court for the Eastern District of New York.
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| 5. | On July 16, 2009, Respondent and Charles Harris, as Vice President of Respondent, entered into a Consent Order with the Arizona Department of Financial Institutions. |
| 6. |
On August 28, 2009, Respondent filed an application for Renewal of Consumer Collection Agency License (“Renewal Application”). In response to Question 8 on the Renewal Application which asked, in pertinent part, “[h]as the applicant, . . . or any officer, director, trustee, principal employee, or shareholder owning ten percent or more of outstanding stock of the applicant (if the applicant is a corporation) . . . (e) ever been the subject of actions (cease and deist orders, consent orders, injunctions, license suspensions or revocations, etc.) by any regulatory agency, state or federal?”, Respondent answered “No”. |
| 7. | On January 22, 2010, pursuant to Section 4-182(c) of the Connecticut General Statutes, the Division sent a letter to Respondent giving Respondent an opportunity to show compliance with all lawful requirements for retention of its consumer collection agency license in Connecticut. |
| 8. | By letter dated January 28, 2010, Respondent responded to the Division’s January 22, 2010 letter; however, the Commissioner was not persuaded by its response. |
III. STATUTORY AND REGULATORY BASIS FOR REVOCATION OF AND
REFUSAL TO RENEW CONSUMER COLLECTION AGENCY LICENSE,
ORDER TO CEASE AND DESIST AND IMPOSITION OF CIVIL PENALTY
Section 36a-804 of the Connecticut General Statutes provides, in relevant part, that:
(a) The commissioner may . . . revoke or refuse to renew any [consumer collection agency] license or take any other action, in accordance with the provisions of section 36a-51, for any reason which would be sufficient grounds for the commissioner to deny an application for a license under sections 36a-800 to 36a-810, inclusive, or if the commissioner finds that the licensee or any proprietor, director, officer, member, partner, shareholder, trustee, employee or agent of such licensee has done any of the following: (1) Made any material misstatement in the application; . . . . or (3) violated any of the provisions of sections 36a-800 to 36a-810, inclusive, or of any regulations adopted pursuant thereto . . . .
(b) 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, . . . the commissioner may take action against such person . . . in accordance with sections 36a-50 and 36a-52.
Section 36a-805(a) of the Connecticut General Statutes provides, in relevant part, that:
No consumer collection agency shall: . . . (12) commingle money collected for a creditor, claimant or forwarder with its own funds or use any part of a creditor’s, claimant’s or forwarder’s money in the conduct of its business . . . .
Section 36a-809-7(b) of the Regulations provides, in relevant part, that:
Each consumer collection agency shall deposit funds received from debtors in a separate account which shall not be commingled with funds of the consumer collection agency or used in the conduct of the consumer collection agency’s business. Such account shall not be used for any purpose other than (1) the deposit of funds received from debtors, (2) the payment of such funds to creditors, and (3) the payment of earned fees to the consumer collection agency. . . .
| 1. |
Respondent’s “no” response to Question 8(e) on the Renewal Application in light of the June 10, 2009 Consent Decree and July 16, 2009, Consent Order, as more fully described in paragraphs 4 through 6, inclusive, of the Matters Asserted, constitutes the making of a material misstatement in the Renewal Application. Such conduct constitutes sufficient grounds for the Commissioner to revoke and refuse to renew Respondent’s license to act within Connecticut as a consumer collection agency pursuant to Section 36a-804(a)(1) of the Connecticut General Statutes and subsections (a) and (b) of Section 36a-51 of the 2010 Supplement to the General Statutes. |
| 2. |
Respondent’s commingling of money collected from debtors on behalf of creditors with its own funds and using such funds for Respondent’s own business, as more fully described in paragraph 3 of the Matters Asserted, constitutes a violation of Section 36a-805(a)(12) of the Connecticut General Statutes and Section 36a-809-7(b) of the Regulations. Such violation constitutes sufficient grounds for the Commissioner to revoke and refuse to renew Respondent’s license to act within Connecticut as a consumer collection agency pursuant to Section 36a-804(a)(3) of the Connecticut General Statutes and subsections (a) and (b) of Section 36a-51 of the 2010 Supplement to the General Statutes, and forms a basis to issue an order to cease and desist against Respondent pursuant to Sections 36a-804(b) and 36a-52(a) of the Connecticut General Statutes and an order imposing civil penalty pursuant to Sections 36a-804(b) and 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. The Commissioner intends to impose a maximum civil penalty upon Respondent not to exceed Thirty Dollars ($30,000), subject to Respondent’s right to a hearing on the allegations set forth above.
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IV. NOTICE OF INTENT TO REVOKE AND REFUSE TO RENEW
CONSUMER COLLECTION AGENCY LICENSE, 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 Respondent has engaged in acts or conduct which constitutes sufficient grounds for the Commissioner to revoke and refuse to renew Respondent’s license to act within Connecticut as a consumer collection agency pursuant Sections 36a-804(a)(1) and 36a-804(a)(3) of the Connecticut General Statutes and subsections (a) and (b) of Section 36a-51 of the 2010 Supplement to the General Statutes, and forms a basis to issue an order to cease and desist against Respondent pursuant to Sections 36a-804(b) and 36a-52(a) of the Connecticut General Statutes and an order imposing civil penalty against Respondent for each violation of Section 36a-805(a)(12) of the Connecticut General Statutes and Section 36a-809-7(b) of the Regulations pursuant to Sections 36a-804(b) and 36a-50(a) of the Connecticut General Statutes.
NOW THEREFORE, notice is hereby given to Respondent that the Commissioner intends to REVOKE AND REFUSE TO RENEW Respondent’s license to act within Connecticut as a consumer collection agency, issue an order requiring Respondent to CEASE AND DESIST from violating Section 36a-805(a)(12) of the Connecticut General Statutes and Section 36a-809-7(b) of the Regulations, and impose a CIVIL PENALTY upon Respondent in an amount not to exceed Thirty Thousand Dollars ($30,000), subject to its right to a hearing on the allegations set forth above.
A hearing will be granted to 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 Respondent’s receipt of this Notice of Intent to Revoke and Refuse to Renew Consumer Collection Agency License, 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 subsections (a) and (b) of Section 36a-51 of the 2010 Supplement to the General Statutes, and Sections 36a-52(a) and 36a-50(a) of the Connecticut General Statutes. This Notice of Intent to Revoke and Refuse to Renew Consumer Collection Agency License, 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. The enclosed Appearance and Request for Hearing Form must be completed and mailed to the above address. If 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 May 12, 2010, 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 Respondent fails to appear at the requested hearing. At such hearing, Respondent 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 Respondent does not request a hearing within the time prescribed, the Commissioner will issue an order revoking and refusing to renew Respondent’s license to act within Connecticut as a consumer collection agency, issue an order requiring Respondent to cease and desist from violating Section 36a-805(a)(12) of the Connecticut General Statutes and Section 36a-809-7(b) of the Regulations, and may order that the maximum civil penalty in an amount not to exceed Thirty Thousand Dollars ($30,000) be imposed upon Respondent.
So ordered at Hartford, Connecticut
this 24th day of March 2010. ________/s/_________
Howard F. Pitkin
Banking Commissioner
this 24th day of March 2010. ________/s/_________
Howard F. Pitkin
Banking Commissioner
CERTIFICATION
I hereby certify that on this 25th day of March 2010, the foregoing Notice of Intent to Revoke and Refuse to Renew Consumer Collection Agency License, Notice of Intent to Issue Order to Cease and Desist, Notice of Intent to Impose Civil Penalty and Notice of Right to Hearing was sent by registered mail, return receipt requested, to Oxford Collection Agency, Inc. d/b/a Oxford Management Services, Attention: Denise Robbins, Cornerstone Support, Inc., 11111 Houze Road, Suite 200, Roswell, Georgia, registered mail no. RB028036929US; and Attention: Peter Pinto, President, 135 Maxess Road, Melville, New York 11747, registered mail no. RB028036976US.
________/s/_________
Doniel Kitt
Prosecuting Attorney
Prosecuting Attorney