On July 17, the North Carolina attorney general announced a lawsuit filed against multiple debt collection entities and their owner for allegedly collecting or attempting to collect on consumer debts in North Carolina without filing the appropriate registration or obtaining the necessary permits to operate as a debt collection agency in the state. According to the complaint, the entities, based and registered in Texas, purchased unpaid debts from a national rent-to-own consumer goods company. North Carolina customers allegedly received misleading collection notices from the entities simulating actual court notices and implying the customers had committed criminal offenses. Additionally, the complaint alleges that the entities filed criminal complaints against the customers, containing misleading information and resulting in actual summonses being issued. The complaint alleges violations of North Carolina’s Unfair and Deceptive Trade Practices Act, Business Corporation Act, Professional Corporation Act, Uniform Partnership Act, and North Carolina’s Prohibited Practices by Collection Agencies Engaged in Collection of Debts from Consumers and seeks among other things, civil penalties, restitution, and injunctive relief.
As a result of the complaint filing, the court approved a temporary restraining order prohibiting the entities from engaging in debt collection practices and scheduled a preliminary injunction hearing.
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