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   Home      CFPB Forces Largest Bad Check Restitution Company to Change Practices

CFPB Takes Action Against “Bad Check” Debt Collector

Nationwide Operation Deceptively Threatened Consumers with Criminal Prosecution and Jail Time for Writing Bounced Checks

WASHINGTON, D.C. — Today, the Consumer Financial Protection Bureau (CFPB) announced an enforcement action against a nationwide debt collection operation and its chief executive officer for using deceptive threats of criminal prosecution and jail time in order to intimidate consumers into paying debts for bounced checks. The company also misled consumers into believing that they must enroll in a costly financial education program to avoid criminal charges. The proposed order, if approved by a federal district court, would put an end to the illegal activities, impose a civil money penalty of $50,000, and require new consumer disclosures and stronger oversight of the bounced check program.

“National Corrective Group masqueraded as prosecutors and used deceptive tactics to intimidate consumers into paying hundreds of dollars in extra fees to avoid potential criminal prosecution,” said CFPB Director Richard Cordray. “Today we are taking action to put a stop to these illegal debt collection practices.”
The CFPB’s proposed order names National Corrective Group, a privately-held, California-based corporation that operates nationwide and specializes in the collection of consumer debt for bounced checks. The order also includes several related entities that purchased all of the contracts and assets of National Corrective Group and took over its operation during the course of the CFPB investigation. These companies are Victim Services Inc. and American Justice Solutions, Inc. Together, these companies operate one of the largest bad check diversion programs in the United States. Mats Jonsson, National Corrective Group’s Chief Executive Officer, is the senior company executive in charge of the daily operations of its bad check diversion programs and continues to operate Victim Services Inc. and American Justice Solutions, Inc.
This is welcome news indeed.  Under the Consent Order, National Corrective Group, Inc. (a/k/a "Corrective Solutions) and its successor, Victim Services, Inc., will no longer be able to trick consumers into thinking that the local district attorney is going to prosecute them if they do not pay $200+ for a "Bad Check Restitution Program."   However, the Consent Order does nothing to force these companies to repay the millions of dollars in unlawful fees that they have tricked consumers into paying. It also has no direct impact on the largest competitor of these companies, Bounceback, Inc., which operates the "Check Enforcement Program" in Washington, California and other states.  We are currently suing all these companies to get full relief for consumers, including a refund of all unlawful fees.  In California, we represent consumers in Breazeale v. National Corrective Group, Inc., et al., filed in federal court in San Francisco.  In Washington, we represent consumers in Cavnar v. Bounceback, Inc., et al., filed in federal court in Spokane.  We are also talking to Check Enforcement Program victims in Mendocino and San Diego counties in California.
To see the full press release about the new CFPB action against National Corrective Group, Inc., Victim Services, Inc. and Mats Jonsson, click on this link.

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