Attorney General sues Wenatchee debt collectors for unlicensed operation
OLYMPIA — Washington Attorney General Bob Ferguson filed suit last week against a string of debt-collection agencies owned by a Wenatchee man, alleging the firms garnished wages, seized bank accounts and threatened foreclosure on debtors despite not being licensed with the state.
The lawsuit, filed Friday, alleges the companies owned by Brian Fair — EGP Investments, formed in 2009, JPRD Investments, formed in 2007 and The Collection Group, formed in 2004 — held no license when they bought up portfolios of old debt held by Washington consumers and began aggressive collections efforts. None of the companies were licensed as collections agencies until 2013. In the years prior to obtaining license, the companies "unlawfully sued and obtained judgments on the debts of at least 3,500," Ferguson's office said in a news release. "The companies are still collecting on unlawfully obtained debts."
It is legal under the state's Collection Agency Act and Consumer Protection Act to buy debt without a license, but not to act as a collection agency. The law has been in effect since 1971.
Purchase of old debt allows the buyer to often pay just pennies on the dollar of the face amount of the debt, then sue to collect the full amount owed.
Fair's companies have garnished up to 25 percent of debtors' paychecks, and threatened to foreclose on homes. Ferguson's lawsuit specifies homes in King County, where the companies have recorded more than 490 judgments and used them as leverage for foreclosure.
One of Fair’s companies also allegedly violated the Collection Agency Act by failing to properly notify consumers about the interest that had accrued on their debts. Ferguson’s lawsuit asks the King County Superior Court to halt collection on illegally obtained judgments and update consumers’ credit reports to remedy any harms, and pay restitution to consumers. The Consumer Protection Act allows a civil penalty of up to $2,000 per individual violation.
Fair has yet to respond to the civil suit.