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Temporary Order to Cease and Desist, Notice of Intent to Issue Order to Cease and Desist and Notice of Intent to Impose Civil Penalty
On May 13, 2024, the Commissioner issued a Temporary Order to Cease and Desist, Notice of Intent to Issue Order to Cease and Desist, Notice of Intent to Impose Civil Penalty and Notice of Right to Hearing (“Order and Notice”) in the matter of: CREDIT RECOVERY MANAGEMENT GROUP LLC d/b/a CR GROUP (“Respondent”), Tonawanda, New York. The Order and Notice was the result of an investigation by the Consumer Credit Division. The Commissioner alleges in the Order and Notice that: (1) Respondent’s acting within this state as a consumer collection agency without a consumer collection agency license constitutes violations of Section 36a‑801(a) of the Connecticut General Statutes in effect at such time, which form the 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 to impose a civil penalty upon Respondent pursuant to Sections 36a‑804(b) and 36a-50(a) of the Connecticut General Statutes; (2) Respondent failed to provide information requested during the investigation or otherwise cooperate with the Commissioner, in violation of Section 36a-17(e) of the Connecticut General Statutes, which form the 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 to impose a civil penalty upon Respondent pursuant to Sections 36a-804(b) and 36a-50(a) of the Connecticut General Statutes; and (3) Respondent failed to establish a system for supervision and compliance under Section 36a‑805(a)(15) of the Connecticut General Statutes, which forms the 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 to impose a civil penalty upon Respondent pursuant to Sections 36a-804(b) and 36a-50(a) of the Connecticut General Statutes. The Commissioner found that the public welfare required the issuance of a Temporary Order to Cease and Desist against Respondent. Respondent was afforded an opportunity to request a hearing with regard to the allegations set forth in the Order and Notice.
Temporary Order to Cease and Desist, Notice of Intent to Issue Order to Cease and Desist and Notice of Intent to Impose Civil Penalty
On May 13, 2024, the Commissioner issued a Temporary Order to Cease and Desist, Notice of Intent to Issue Order to Cease and Desist, Notice of Intent to Impose Civil Penalty and Notice of Right to Hearing (“Order and Notice”) in the matter of: NELSON CRUZ & ASSOCIATES LLC (NMLS # 1862472) (“Respondent”), Dallas, Texas. The Order and Notice was the result of an investigation by the Consumer Credit Division. The Commissioner alleges in the Order and Notice that: (1) Respondent’s acting within this state as a consumer collection agency without a consumer collection agency license constitutes violations of Section 36a‑801(a) of the Connecticut General Statutes in effect at such time, which form the 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 to impose a civil penalty upon Respondent pursuant to Sections 36a-804(b) and 36a-50(a) of the Connecticut General Statutes; (2) Respondent failed to provide information requested during the investigation or otherwise cooperate with the Commissioner, in violation of Section 36a-17(e) of the Connecticut General Statutes, which form the 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 to impose a civil penalty upon Respondent pursuant to Sections 36a-804(b) and 36a-50(a) of the Connecticut General Statutes; (3) Respondent failed to establish a system for supervision and compliance under Section 36a‑805(a)(15) of the Connecticut General Statutes, which forms the 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 to impose a civil penalty upon Respondent pursuant to Sections 36a-804(b) and 36a-50(a) of the Connecticut General Statutes; and (4) Respondent acted in a manner that failed to comply with 12 CFR Section 1006.14 Regulation F of the Fair Debt Collection Practices Act (“FDCP Act”), by the frequency of telephone calls Respondent made to the complainant in connection with the debt, and failed to comply with 12 CFR Section 1006.34 Regulation F of the FDCP Act, by failing to provide the complainant with validation of the debt, which constitutes a violation of Section 36a-812 of the Connecticut General Statutes, which violations form the 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 to impose a civil penalty upon Respondent pursuant to Sections 36a-804(b) and 36a-50(a) of the Connecticut General Statutes. The Commissioner found that the public welfare required the issuance of a Temporary Order to Cease and Desist against Respondent. Respondent was afforded an opportunity to request a hearing with regard to the allegations set forth in the Order and Notice.
Temporary Order to Cease and Desist, Order to Make Restitution, Notice of Intent to Issue Order to Cease and Desist and Notice of Intent to Impose Civil Penalty
On May 13, 2024, the Commissioner issued a Temporary Order to Cease and Desist, Order to Make Restitution, Notice of Intent to Issue Order to Cease and Desist, Notice of Intent to Impose Civil Penalty and Notice of Right to Hearing (“Order and Notice”) in the matter of: MIDLAND GROUP AND ASSOCIATES LLC (“Respondent”), Los Angeles, California. The Order and Notice was the result of an investigation by the Consumer Credit Division. The Commissioner alleges in the Order and Notice that: (1) Respondent’s acting within this state as a consumer collection agency without a consumer collection agency license constitutes violations of Section 36a-801(a) of the Connecticut General Statutes; (2) Respondent’s using false, deceptive or misleading representations in connection with the collection of a debt, including falsely representing that the debt was valid and that a lawsuit would be filed against the consumer by Respondent should the debt remain unpaid, constitutes violations of subdivisions (5) and (10) of Section 36a-809-11 of the Regulations of Connecticut State Agencies; (3) Respondent’s using false, deceptive or misleading representations or means in connection with the collection of any debt, including falsely representing that the alleged debt was valid and that a lawsuit would be filed against the consumer by Respondent should the debt remain unpaid constitutes falsely representing the character, amount or legal status of a debt, in violation of 12 CFR Section 1006.18(b)(2)(i) of Regulation F, threatening to take action that cannot legally be taken or that is not intended to be taken, in violation of 12 CFR Section 1006.18(c)(1) of Regulation F, and using any false representation or deceptive means to collect or attempt to collect any debt, in violation of 12 CFR Section 1006.18(d) of Regulation F, violations of which constitute violations of Section 36a-812 of the Connecticut General Statutes; and (4) Respondent’s failure to provide information requested during the investigation constitutes a violation of Section 36a-17(e) of the Connecticut General Statutes. The Commissioner found that the public welfare required the issuance of a Temporary Order to Cease and Desist against Respondent. Respondent was afforded an opportunity to request a hearing with regard to the allegations set forth in the Order and Notice.
Consent Order
On May 23, 2024, the Commissioner entered into a Consent Order with BlockFi Trading LLC d/b/a BlockFi Trading d/b/a BlockFi (NMLS # 1873137), Jersey City, New Jersey (“BlockFi”). The Consent Order resolved allegations made by the Commissioner in a Notice of Automatic Suspension, Notice of Intent to Revoke Money Transmission License, Notice of Intent to Issue Order to Cease and Desist, Notice of Intent to Impose Civil Penalty and Notice of Right to Hearing issued against BlockFi on February 14, 2023 (“Notice”). The Notice was the result of an investigation by the Consumer Credit Division. The Commissioner alleged in the Notice that: (1) BlockFi’s failure to transmit monetary value received from Connecticut purchasers is conduct that is likely to materially prejudice the interests of purchasers, which constitutes an unsafe or unsound practice within the meaning of Section 36a-608(a) of the Connecticut General Statutes; and (2) BlockFi’s failure to maintain a surety bond that runs concurrently with the period of its money transmission license, as required pursuant to Section 36a-602(a) of the Connecticut General Statutes, constitutes sufficient grounds for the Commissioner to revoke BlockFi’s license to engage in the business of money transmission in Connecticut pursuant to Section 36a-602(c) of the Connecticut General Statutes and subsections (a) and (b) of Section 36a-51 of the Connecticut General Statutes. As part of the Consent Order, BlockFi agreed to the issuance of a civil penalty in the amount of $150,000. The civil penalty is considered an allowed general unsecured claim against BlockFi, Inc., in In re BlockFi, Inc., Case No. 22-19361 pending in the United States Bankruptcy Court for the District of New Jersey.
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