Attorney General Andrew M. Cuomo today announced that his office has filed a lawsuit seeking to shut down a Buffalo-based debt collection operation consisting of 13 debt collection companies run by Buffalo residents Omar Smith, Narvell Benning and Keith Marshall (collectively, the “Benning-Smith Group”). Today’s announcement is the latest action in Attorney General Cuomo’s ongoing investigation of unlawful debt collection practices.
According to the more than 850 consumer complaints filed with the Office of the Attorney General, the Federal Trade Commission and the Better Business Bureau, the Benning-Smith Group’s employees violated state and federal law by routinely posing as law enforcement officials and threatening to arrest or to physically harm consumers unless they made arrangements to pay the company immediately. Additionally, the Benning-Smith Group made abuse and humiliation a trademark of their collection practices by verbally abusing consumers and, in some instances, sexually harassing them. To date, the Attorney General’s investigation has identified more than a thousand instances in which the Benning-Smith Group breached state and federal statutes. Cuomo’s lawsuit, filed today in Buffalo Supreme Court, seeks to shut down all of the Benning-Smith Group’s operations in the Western New York.
“This company made lies, threats and abuse their calling cards in their efforts to manipulate and take advantage of consumers already facing tough economic times,” said Attorney General Andrew Cuomo. “They did everything they could to demean and humiliate their targets, stooping so low as to sexually harass and verbally abuse individuals nationwide. My Office will continue to protect consumers by making it clear that companies like this one will not be permitted to operate in the State of New York.”
According to the lawsuit filed by the Attorney Generals Office, Omar Smith, Narvell Benning and Keith Marshall ran at least 13 debt collection companies that operated out of multiple locations and under various assumed names in Western New York. The Benning-Smith Group operated under several names, including: Abrams, Burke & Associates; Benning and Smith Acquisitions, Inc.; Brady and Caruso, LLC; DebtPayments.com; DebtPayments.com, LLC; Fredericks, Goldstein & Zoe; Graham, Noble & Associates Bookkeeping; Graham, Noble & Associates LLC; Graham, Beagle & Associates LLC; Kingman, Cole and Associates, LCC; Marshall and Ziolkowski Enterprise, LLC; Marshall Ziolkowski Acquisitions, LLC; Lansky, Goldstein, Zoe; OLS Payment Services; and University Debt Collection.
Attorney General Cuomo’s investigation revealed that collectors regularly demanded payment for non-existent debts or substantially inflated the amount owed on an actual debt. Using their false law enforcement identities, collectors coerced and cajoled terrified consumers into agreeing to make payments. Frightened at the prospect of arrest and humiliation, consumers authorized withdrawals from their checking accounts, sent Western Union moneygrams and/or money orders out of fear.
In one instance, a Benning-Smith collector kept repeating the name of a consumer’s daughter, describing various sexual things he would do to her unless the debt was paid. Another collector told a female consumer that if both she and her husband would engage in sexual acts with him, he would pay their debt himself. Collectors routinely called consumers “drunks,” “scumbags,” “deadbeats,” and, in one instance, “a low-life piece of trash.”
The federal Fair Debt Collection Practices Act, the New York State debt collection and consumer protection laws prohibit the following conduct: posing as an attorney, threatening lawsuits or other legal action which cannot be taken, saying a consumer committed a crime or will be arrested and talking with third parties except to get location information. These statutes also bar the use of deception and harassment in collection practices. The law further requires collection agencies to send a written notice within five days of initial communication with the consumer explaining how he or she can dispute the debt. If properly disputed, the collection agency must stop all collection attempts and send verification.
Today’s action is part of a larger investigation by Attorney General Cuomo into unlawful debt collection practices. In June, Cuomo obtained a court order shutting down the fraudulent activities of another Buffalo-based collection racket and initiated criminal charges against the owner of that operation. His Office previously shut down two other collectors for threatening and intimidating consumers into paying debts that they did not owe. Additionally the Office of the Attorney General remains engaged in litigation with two debt settlement companies for fraudulent business practices and false advertising by selling misleading debt settlement plans that very rarely deliver the promised benefits to consumers dealing with debt.